Stephen Jacobi, NZIBF Executive Director, speaks to the Confederation of Indian Industry Partnership Summit in New Delhi about The Future of Multilateralism.
TPP – a big shift for agriculture?

Mixed bag of immediate benefits for agriculture from TPP, but bigger changes ahead.
On 4 February, at the TPP signing, the earth moved. Imperceptibly to most, frustratingly for some, but the tectonic plates holding together world trade shifted, as 12 economies embarked together on a new economic enterprise. This may be cold comfort to New Zealand farmers coping with drought and falling prices, but over time TPP will advance their interests, with some seeing the benefits earlier than others.
It often seems like nothing ever changes for trade in agriculture. Even as tariffs are reduced, new non-tariff barriers seem to put in place. But change does occur – think of the impact of the GATT Uruguay Round, which put a cap on subsidies and paved the way for increasing commodity prices. The impact may not be felt immediately but signals are sent, markets take note and investment and production adjust.
This is essentially what will happen with TPP. The signing in Auckland may have been largely symbolic – the deal was concluded last October and a draft text released the following month – but already a number of countries have indicated that they too would like to join – South Korea, Thailand, the Philippines, Taiwan and Colombia, even Indonesia. This is not going to happen overnight either as TPP itself could take up to two years to get ratified. But for now the writing is on the wall and a new framework of rules for trade and investment has been established.
Meantime there’s plenty of more tangible benefit for New Zealand farmers -even for dairy, which, with justification, feels left out of the deal. All New Zealand’s major agricultural export sectors including dairy are covered by TPP, which will result on full implementation in tariff savings of $202 million per annum out of total tariff savings for all sectors of $259 million. That’s not new business; just tariffs saved which make New Zealand products more competitive in foreign markets.
Beef farmers may feel the greatest benefit. The beef tariff in the critical Japanese market will drop from 38.5% to 9% over 15 years ensuring that New Zealand is not disadvantaged against Australia which earlier negotiated an FTA with Japan. The tariff saving amounts to $18 million immediately and $48 million once the lower tariff level is reached. In the United States the small in-quota tariff will be eliminated on entry into force resulting in savings of $10.8 million. Tariffs on sheepmeat in all TPP economies will be free after 8 years and for wool after 10 years. The deer industry gets little immediate benefit as tariffs are already free, but will get an opportunity to address issues when others like Korea join. Across all sectors TPP provides mechanisms to address non-tariff barriers and promote regulatory coherence which will result in less cost and more secure trade.
Tariff reductions are also achieved for horticultural products including kiwifruit, apples and a range of other fruit and vegetables – the savings are worth around $26 million. Wine and forest products also achieve important gains.
Has dairy been left out of the TPP party? To a large extent, yes – the liberalisation achieved is less than other sectors and some important barriers will remain even after full implementation. That is of great disappointment to all those involved in the negotiating process. It also reflects badly on successive announcements from TPP Ministers that this would be a ‘high quality, ambitious and comprehensive’ deal. In the end, under pressure from their own highly protected industries, the US and Japan were unwilling to open their markets. This has resulted in a lopsided agreement and one, which most certainly is not in the interests of competitive US dairy exporters. But there is another side to this story – the dairy industry gains some useful concessions giving a limited degree of additional access to markets like the United States, Japan, Canada and Mexico. Peru unfortunately remains closed. The value of tariff reductions for dairy are valued at $102 million, still more than any other sector. Importantly too a process of agricultural reform is underway in Japan, which could see significant change in the future.
Even if the glass of milk in TPP is less than half full, the wider implications of the agreement apply. In 30 years time, when the last of the miniscule dairy tariff reductions take effect, the world will look very different. It is hard to believe that TPP will not have evolved further and the international trading system with it. New Zealand needs to use all opportunities open to it, through implementation and future expansion, to address unfinished TPP business. Meantime back home the Parliamentary process for ratification is getting underway. Farmers’ voices need to be heard in the coming debate to ensure prompt ratification so agriculture can benefit from the global shifts in trade policy that TPP encourages.
Originally published in Rural News on 17 February, 2016.
REGISTER WITH TRADE WORKS
Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.
Latest News
Remarks to Confederation of Indian Industry Partnership Summit, New Delhi, 15 March 2023
"The Future of Multilateralism" by Stephen Jacobi, NZIBF Executive Director Namaskar Tēnā koutou katoa – greetings to you all in the language of the Māori people of Aotearoa New Zealand. It is an honour for me to speak to such a distinguished gathering today....
AMIDST THE STORM: ABAC MEETS IN AUCKLAND
Perhaps a cyclone was after all a fitting backdrop for the meeting of the APEC Business Advisory Council (ABAC) which was held in Auckland on 12-14 February – the global environment against which the meeting took place is decidedly stormy. In the event the wind...
Asia-Pacific business leaders call for action on climate and economic inclusion
APEC NEWS RELEASE Issued by The APEC Business Advisory Council (ABAC) Auckland, 14 February 2023 - Members of the APEC Business Advisory Council (ABAC) met in Auckland, New Zealand this week to develop a work plan that calls on policymakers to leverage trade and...
ASIA-PACIFIC BUSINESS LEADERS GATHERING IN AUCKLAND, 12-14 FEBRUARY 2023
Media Release - 8 February 2023 Equity, sustainability and opportunity are key themes of one of the largest gatherings of senior Asia-Pacific business leaders held in New Zealand for some time. The APEC Business Advisory Council (ABAC) is due to meet in Tāmaki...
A YEAR FOR RECONNECTING
As I write this end of year dispatch, NZIBF is preparing to host the first meeting for 2023 of the APEC Business Advisory Council (ABAC). We are looking forward to welcoming the 200 or so business leaders and senior officials from APEC member economies across the...
MAJOR GATHERING OF ASIA-PACIFIC BUSINESS LEADERS TO BE HELD IN AUCKLAND, 12-14 FEBRUARY 2023
Media Release - 14 December 2022 Sustainability, digitalisation and resilient, inclusive trade will be key themes of a major gathering of senior Asia-Pacific business leaders to be held in Auckland early next year – the first such event to be held in New Zealand...
NZ Herald: Time to lift our game in India
Following his recent visit to India our Executive Director Stephen Jacobi penned this article advocating a more strategic approach to the further development of the relationship. The article was published by the NZ Herald on 9 December.
APEC Rolls out Priorities for 2023
Issued by the Informal Senior Officials’ Meeting - Honolulu, The United States, 13 December 2022 Aiming to provide tailwinds for member economies to strengthen recovery and resilience, as well as advance broad-based economic growth, the United States rolled out its...
NZIBF 2022 Chair Report
ANNUAL GENERAL MEETING 2022 CHAIR’S REPORT I am pleased to present my second report on the activities and achievements of the NZ International Business Forum (NZIBF) for 2022-23, our fifteenth year of operations. At the outset I would like to thank Members for...
APEC Leaders Issue 2022 Declaration and the Bangkok Goals on the Bio-Circular-Green Economy
Issued by the APEC Economic Leaders' Meeting Bangkok, Thailand, 19 November 2022 The Leaders of the 21 APEC member economies issued the 2022 Leaders’ Declaration following the 29th APEC Economic Leaders’ Meeting chaired by the Prime Minister of Thailand,...
NZ BUSINESS LEADERS AT APEC 2022
New Zealand business will be represented at the APEC Leaders’ Week in Bangkok, commencing 13 November, by members of the APEC Business Advisory Council (ABAC). New Zealand’s three members – Rachel Taulelei, Malcolm Johns and Anna Curzon – supported by Stephen Jacobi...
Submission to the Ministry of Foreign Affairs and Trade: Re-Development of the Framework for Integrating Labour Standards and Trade Agreements
Submission by NZIBF – October 2022 This submission is made on behalf of the NZ International Business Forum (NZIBF), whose members are listed at Annex A[1]. NZIBF is a forum of senior business leaders working together to promote New Zealand’s engagement in the global...
Address to the 51st One Stop Update for The Accountant In Business, 25 October 2022
ADDRESS TO THE 51st ONE STOP UPDATE FOR THE ACCOUNTANT IN BUSINESS AUCKLAND, 25 OCTOBER 2022 STEPHEN JACOBI EXECUTIVE DIRECTOR NZ INTERNATIONAL BUSINESS FORUM GLOBAL ECONOMIC UPDATE Thanks to Brightstar for inviting me back to address this conference once again. When...
Submission to MPI on Modernising Our Export Assurances Systems: Legislative Options
Submission by Export NZ and NZIBF - 29 September 2022 1.0 INTRODUCTION 1.1 Export New Zealand (ExportNZ) and the New Zealand International Business Forum (NZIBF) welcome the opportunity to comment on the Ministry for Primary Industries’ (MPI) Modernising Our Export...
Submission to MFAT for CPTPP Review
30 September 2022 Phil Mellor Economic Division, Ministry of Foreign Affairs and Trade, Wellington (By email) Dear Phil, Thank you for your email of 1 September, seeking our comments on the three year review of the Comprehensive and Progressive Agreement for Trans...