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TPP good news for sheep and beef farmers

TPP good news for sheep and beef farmers

Beef + Lamb New Zealand (B+LNZ) welcomes the successful conclusion of the Trans-Pacific Partnership (TPP) negotiations, as announced by TPP Trade Ministers in Atlanta, USA today.

“This deal will help improve the competitiveness of our exports by removing tens of millions of dollars of tariff costs,” said B+LNZ CEO Dr Scott Champion.

New Zealand’s current sheep and beef sector trade to the TPP countries totaled more than $2.4 billion in 2014, almost one third of the industry’s total exports to the world.

The sheep and beef sector’s exports to TPP countries were charged a total of $94.3 million in 2014, with the majority of that cost ($77.4 million) incurred on exports to Japan. Significant tariff costs were also charged on exports to the US ($13 million) and Mexico ($2.9 million).

The vast majority of these tariff costs, around $72 million, will be removed over time by this agreement, improving the competitive positioning of New Zealand red meat products in TPP markets.

B+LNZ has been pushing for a TPP deal that removes barriers to New Zealand’s sheep and beef sector exports since before the negotiation began in 2008.

This push has been made alongside other groups representing the New Zealand red meat and broader agriculture sectors, and jointly with other TPP-country beef exporters under the banner of the Five Nations Beef Alliance (members include Beef + Lamb New Zealand, the Cattle Council of Australia, Canadian Cattlemen’s Association, Confederacion Nacional de Organizaciones Ganaderas Mexico, and the National Cattlemen’s Beef Association USA).

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“We understand that the TPP will eliminate tariffs on New Zealand’s sheep and beef sector exports to the US, Canada, Mexico, Peru and Vietnam,” said Dr Champion.

New Zealand’s sheep and beef sector exports to Japan will also benefit significantly from the deal. While Japan’s beef tariffs will not all be eliminated, they will be lowered from potentially as high as 50% to a maximum of 9% over time. Japan is a very significant market for New Zealand, taking $164 of beef exports in 2014 which incurred $63 million in tariffs.

The Japanese commitments on beef include a TPP-wide safeguard that is set above current trade levels.

“The Japanese market has been our major focus in the TPP, especially as the competitive position of our beef exports in Japan has been negatively affected by the recent Australia-Japan FTA.

“Provided that the ratification process is completed quickly, the TPP agreement will ensure that New Zealand beef gets back onto a level playing field with its Australian competition in the Japanese market.”

Other TPP members, including Singapore, Brunei, Australia, Malaysia and Chile are all important or potential markets where sheep and beef sector tariffs have already been eliminated under existing free trade agreements.

Other provisions of the agreement, including ways to address non-tariff barriers, will also prove useful in terms of opening markets and ensuring that they stay open.

“We hope that other countries will continue to consider joining the TPP when they are able to meet the high standard that has been set.”

“The New Zealand agriculture sector generates 62% of New Zealand’s goods exports. If that sector can capture greater value for New Zealand as a result of the TPP, that will lift the standard of living for all Kiwis and ensure that rural communities can prosper.”

B+LNZ congratulates Minister Groser and New Zealand’s trade negotiators on their success, and looks forward to seeing the full details of this hugely significant agreement.

ENDS

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