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$11,500 More For Farmers From Trade Liberalisation

25 March 2002

Every Beef, Sheep, And Dairy Farmers Gained Average Of $11,500 Extra From Trade Liberalisation

Sheepmeat, beef, and dairy farmers each earned at least $11,500 extra in 2000 because of gains from the Uruguay Round of trade liberalization, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton told the Federated Farmers meat and fibre producers' meeting in Wellington that provisional findings of Ministry of Agriculture and Forestry researchers on the quantitative benefits of the last big round of international trade negotiations, the Uruguay Round, indicated in the single year of 2000 (the year that many of the gains of the Uruguay Round kicked in) the beef, sheepmeat, and dairy sectors gained about $590 million from product price and volume increases in the major markets of the United States and European Union, Mr Sutton said.

"MAF warns that this figure probably understates the likely gains accruing to the whole primary production sector because: they only look at beef, sheepmeat, and dairy; they consider only the main effects of the agreement on agriculture on trade patterns in those sectors; and they do not look at gains arising from savings in tariff duties.

"MAF also says there are further gains from the Uruguay Round which are far less easy to quantify, including: the firmer trade rules; a strengthened dispute settlement system; and the dynamic effects of a world economy stronger than it would have been without such an agreement."

Mr Sutton said one benefit of the stronger dispute settlement mechanism was quantifiable.

"That is the removal of the increased tariff on New Zealand lamb exported to the United States in October last year, after New Zealand successfully took a case to the World Trade Organisation dispute settlement panel. That single decision is generating gains to New Zealand, in the form of lower tariffs, at an annual rate of about NZ$10 million."

Mr Sutton said the Labour-led Government's policy on trade was clear. Trade liberalisation agreements would only be entered into when they benefited our citizens.

"These preliminary results from MAF's research show that belonging to the WTO does benefit our citizens, both through the gains in increased market access and the binding disputes resolution process.

"This research shows there have been real, tangible gains for New Zealand from the results of the Uruguay Round. Each sheep, beef, and dairy farmer earned more than $11,500 extra in 2000 solely because of gains from the Uruguay Round.

"And that is probably understating the gains they have received."

Mr Sutton said the MAF research was still being worked on and he expected final results and a full report to be available by the end of this year.

Ends

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