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China holds opportunity for New Zealand farmers

Media Release

4 April 2008

China holds opportunity for New Zealand farmers

The Free Trade Agreement (FTA) between New Zealand and China has the potential to deliver significant gains to New Zealand sheep and beef farmers, Meat & Wool New Zealand Chairman, Mike Petersen says.

Mr Petersen, who will be representing the sector alongside the Prime Minister Helen Clark in Beijing next week, says China is experiencing a sustained period of rapid economic growth and the opportunities can't be underestimated.

"China continues to develop rapidly and has a growing middle class population looking to increase its consumption of protein like beef and lamb. An FTA that provides for improved meat access conditions will put New Zealand in a good position to meet this demand."

The FTA secures preferential access to China's economy and Meat & Wool New Zealand has been working with the Government and others to secure an agreement since negotiations began in 2005.

"Meat & Wool New Zealand has played an important role in providing information and promoting the interests of New Zealand sheep and beef farmers. Wool was considered to be quite contentious throughout the FTA negotiations but a very important area for our farmers."

Mr Petersen said as the first developed country to negotiate an FTA with China, New Zealand had "a first-mover" advantage.

"It also strengthens our ability to defend existing market position, particularly with wool, where China is already New Zealand's most important single country market. New Zealand exported NZ$170 million worth of raw wool to China in 2007. China has a high demand for wool and this is expected to increase and so an FTA that provides for improved security for New Zealand wool will be valuable."

New Zealand exported almost NZ$63million worth of sheepmeat and beef to China in 2007.

"Sheepmeat is by far the most significant meat export to China, but we are hopeful also of growing our currently modest trade in beef and co-products.

"New Zealand meat exports have been attracting tariffs of between 12 and 25 percent. Tariff elimination on meat products would enable New Zealand meat exporters to become more competitive in the market," Mr Petersen said.

* China is New Zealand's fourth-largest trading partner after Australia, the US and Japan

* 5.6 percent of New Zealand exports go to China (year end June 2006)

* New Zealand exports to China are worth NZ$1.7 billion

* 11.4 percent of New Zealand's imports are from China (year end June 2006), worth NZ$4.4 billion

* The two-way merchandise trade totals NZ$6.1 billion


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