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NZ/Thai CEP delivers results horticulture industry

NZ/Thai CEP delivers results horticulture industry

Horticulture growers and exporters are delighted by the outcome of Closer Economic Partnership negotiations with Thailand. Tariffs on a number of horticulture products including apples, kiwifruit and carrots drop from as high as 40% to zero from 1 July 2005.

Janet Skilton, Executive Director of the NZ Horticulture Export Authority said “Around $13m worth of New Zealand fruit and vegetables have been entering Thailand annually despite tariffs ranging up to 40%, some of the highest we manage to trade over. The dramatic reduction in tariffs should see exports to Thailand grow as prices to the consumer fall. Thailand has a population of 64 million and a dynamic economy, with a growing number of affluent people wanting good quality, safe food.”

“We have been at a significant disadvantage against Chinese product since October 2003 when China and Thailand signed a trade agreement removing all tariffs on most fruit and vegetable products,” says Peter Silcock, Chief Executive of Vegfed and Fruitgrowers Federation. “Thailand was one of our largest markets for carrots, purchasing $2m a year. Since the Chinese/Thai agreement was signed we have seen volumes drop from 2,500 tonnes to less than 500 tonnes. The price differential between New Zealand and Chinese product in Thailand is around 40%, the level of the tariff.” Mr Silcock is optimistic that New Zealand exporters will be able to compete with Chinese product once the tariff hurdle is removed.

Ms Skilton also emphasises what a great job the New Zealand trade negotiation team did. “Australia signed a free trade agreement in July 2004. We were concerned that the outcomes negotiated by the Australians would be the best that we could expect - not enough when Chinese horticulture products have no tariffs. However, New Zealand did far better in terms of horticulture than the Australians. For example, the Australian deal on carrots saw the tariff drop from 40% to 30% in the first year, phasing down to zero by 2010. Our agreement sees the tariff on carrots drop to zero immediately.”

“In return for the removal of significant tariff trade barriers, the Thai Government is seeking access to the New Zealand market for a number of tropical fruits including mangosteens and durians,” says Mr Silcock. “These products will face the usual risk analysis process from MAF to ensure that foreign plant pests do not enter the country. Our industry strongly supports trade liberalisation and does not see additional tropical fruit in the New Zealand market as a threat.”

The New Zealand industry’s largest exports to Thailand comprise apples, carrots, frozen French fries, dried peas and persimmons:

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