New Zealand dairy and meat exporters slam pact with EU


New Zealand’s meat and dairy exporters have expressed disappointment with the Free Trade Agreement Prime Minister Jacinda Ardern has struck with the European Union.

The results for dairy, New Zealand’s biggest export, were “very disappointing and reflect the level of protectionism that continues to affect dairy trade globally, and in the EU dairy industry in particular,” the Fonterra Cooperative Group said in a statement on Friday. The Meat Industry Association said the deal will only see a small quota for New Zealand beef into the EU, falling far short of expectations.

Ardern announced the FTA overnight from Brussels, where she and Trade Secretary Damien O’Connor were campaigning for a deal on the border, four years after negotiations began. They hailed this as a major achievement that will give New Zealand access to one of the largest and most lucrative markets in the world.

“It’s a strategically important and economically beneficial deal that comes at a crucial time in our export-led Covid-19 recovery,” Ardern said. “It brings tangible gains for exporters in a restrictive agricultural market.”

Under the Free Trade Agreement, it is estimated that New Zealand’s export earnings to the EU will increase by up to NZ$1.8 billion (US$1.1 billion) annually until 2035.

It secures duty-free access to 97% of New Zealand’s current exports to the EU, with over 91% being removed on the FTA’s entry into force date. Exporters will save around NZ$110 million a year by eliminating tariffs.

The kiwifruit, wine, manuka honey and seafood industries appear to be winners as these commodities are immediately exempted from tariffs.

But the Meat Association said the deal will allow for a quota of just 10,000 tonnes of New Zealand beef in a market that consumes 6.5 million tonnes annually.

Dairy giant Fonterra said that while the FTA will provide some small entry opportunities for certain products over time, “the overall commercial opportunities for products like butter, cheese, milk powder and key proteins ​​relative to the size of the EU market are restricted”.

O’Connor said the government has “fought hard for our milk and beef exporters” and that the deal could bring them up to NZ$600 million in additional annual export earnings once the deal is fully operational.

“We have also secured increased access for our butter and cheese producers, some of whom can now trade with the EU for the first time in many years,” he said.

However, the New Zealand Specialist Cheesemakers Association said the country had “bowed to pressure from the EU” and caved in on key cheese names.

Of particular concern is the loss of the Feta name, which will be phased out over nine years, said Board Member Daniel Shields. Europe has also managed to insert the right to restrict new names at a later date, he said.

It is unclear when the free trade agreement will come into force. Both parties have to complete domestic legal procedures and ratify the agreement, which can take several years.

Bloomberg New Zealand dairy and meat exporters slam pact with EU

Fry Electronics Team

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