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Red Meat sector welcomes TPP deal

Red Meat sector welcomes TPP deal and its significant boost to regional growth

Beef and Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) welcome the announcement a deal has been struck to move ahead with the Trans-Pacific Partnership Agreement, which is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Sam McIvor, chief executive of B+LNZ, says the CPTPP will deliver significant gains to the sector.

“New Zealand’s regions are hugely reliant on revenue flowing as a result of exports. Trade is the lifeblood for our sector, which in turn creates jobs and supports communities around New Zealand.

"Over 90 percent of New Zealand’s sheepmeat and 80 percent of our beef production is exported. These exports support around 60,000 jobs on farms and in processing companies, and a further 20,000 jobs in supplying sectors.

“This deal simultaneously opens up multiple markets in Japan, Mexico, Peru and Canada and puts us on a level playing field with other major red meat exporters in the Asia Pacific region, such as Australia and the European Union.

Tim Ritchie, chief executive of the MIA says since Australia’s 2015 trade agreement with Japan, their beef exports to Japan have increased by $NZ1 billion, while New Zealand’s have fallen by $NZ30 million.

“Demand in Japan for beef has been growing, but we have lost significant market share. The situation got tougher in August when Japan imposed a WTO safeguard on frozen beef, raising its tariff on New Zealand exports from 38.5 percent to 50 percent, while Australia only faces a tariff of 22 percent. Since the safeguard was applied, our frozen beef exports to Japan have fallen by 70 percent.”

The agreement announced today captures all of the market access gains of the previous TPP agreement. However, it also addresses some of the concerns of the New Zealanders around TPP – the preservation of PHARMC, foreign ownership of land and housing, and freedom to regulate for our own environmental protection.

Meanwhile, the sector is also celebrating the release of a WTO Appellate Body report which upholds the initial findings of the New Zealand-led dispute against Indonesia on a range of agricultural non-tariff barriers.

Mr Ritchie says these barriers have impacted on New Zealand beef exports to Indonesia and have contributed to a decline of over 80% since 2010 – costing the sector an estimated $1 billion in lost trade.

“We welcome the Appellate Body’s confirmation Indonesia needs to take action to bring these measures into conformity with global trade rules.

“This reinforces the importance and value of the WTO in disciplining pervasive non-tariff barriers that plague the industry.”

Mr McIvor says the sector recognises taking a WTO case is costly both financially and from a resourcing perspective.

“We congratulate Prime Minister Ardern, Deputy Prime Minister Peters, and Minister Parker on their early milestones on trade, and thank the many officials who have been involved in both the TPP negotiations and WTO case.”

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