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China FTA gives better access

Media Release

7 April 2008

China FTA gives better access and more certainty for New Zealand meat and wool exports

Meat & Wool New Zealand says the signing today of the Free Trade Agreement (FTA) with China, will give New Zealand farmers immediate preferential access for their meat exports and certainty of access for wool.

Chairman, Mike Petersen said the agreement had the potential to deliver significant gains to New Zealand sheep and beef farmers with eventual duty free access for meat. Tariffs on meat, sheepskins and edible co-products would be phased out over nine years and tariffs on animal fats would be phased out over five years. Tariff reductions will begin in the first year of operation of the agreement.

"This is a good outcome for New Zealand sheep and beef farmers as it will immediately provide preferential access for New Zealand meat products in China compared to our competitors - plus it will let us build on the current trade."

Mr Petersen said wool was considered particularly contentious throughout the FTA negotiations - and it was one of the last issues to be resolved. The FTA provides for a Country-Specific Tariff Quota (CSTQ) of 25,000 tonnes of clean wool to be imported from New Zealand. This will increase by five percent each year until 2017, creating an eventual country-specific tariff quota of almost 37,000 tonnes.

"This is significant because it gives New Zealand exporters secure duty free access to the Chinese market - and this is a better position to be in. For exports outside the CSTQ, New Zealand exporters will still be able to access China's global wool quota."

Mr Petersen said the agreement strengthened New Zealand's ability to defend its existing market position in wool where China was already New Zealand's most important single country market.

The signing of the FTA also supports the work currently underway by Meat & Wool New Zealand and the major meat exporters to identify new opportunities for a range of quality New Zealand lamb products.

"This FTA with China gives us a strategic advantage because China will play an increasingly important role in the global economy - particularly in the Asia-Pacific region."

Meat & Wool New Zealand will be well placed to build on the opportunities provided by the FTA having appointed China Market Manager, Siu-Lin Shim, who is based in Beijing for the organisation.

ENDS

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