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Luxton Welcomes Venezuelan Dairy Breakthrough

Food and Fibre Minister and Associate International Trade Minister John Luxton today welcomed the moves from Venezuelan customs to reduce the tariff on New Zealand's dairy exports to Venezuela.

The decision follows Ministerial talks in Caracas between Mr Luxton and his Venezuelan counterparts last August to address the overcharging of duty on wholemilk powder estimated at $5 million last year.

"Venezuela had exceeded its WTO bound tariff rate of 40% for New Zealand's $110 million wholemilk powder exports for more than a year and had been charging up to 50% duty. Discussions with officials and a letter from Ministers had not been able to settle the longstanding dispute," Mr Luxton said.

At the Caracas talks, Venezuelan Ministers committed themselves to resolving this issue. Assurances have been received that Venezuela would abide by its WTO commitments and that the 40% tariff be adhered to.

"The Dairy Board has confirmed that shipments are now being cleared at the correct rate. It remains to be seen whether back duties will also be recovered but we are working on that."

With $110 million of exports, the Venezuelan WMP market is one of the New Zealand dairy industry's largest, so the reduction is significant. It is estimated to have cost the New Zealand dairy industry $5 million last year and the overcharging was continuing.

"The resolution will come as a welcome boost at a time when dairy farmers are facing tough times. It is also a tribute to the hard work of New Zealand officials in improving market access for New Zealand's agriculture sector," Mr Luxton concluded.

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