Meat and dairy industries very disappointed with Union trade deal

July 1, 2022 2:00 pm

[Source: RNZ News]

The meat and dairy industries are very disappointed with the outcome of the free trade deal struck between New Zealand and the European Union saying it falls far below their expectations.

The agreement which covers 27 EU member states was unveiled by Prime Minister Jacinda Ardern and President of the European Union Ursula von der Leyen in Brussels.

Dairy Companies Association of New Zealand chairperson Malcolm Bailey said the association was very disappointed in the outcome.

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“We will get very little volume and some of that volume will still be constrained by in quota tariffs and we’re yet to know the full extent of the constraints imposed by quota market administration which could be inhibiting the usability of some of that volume.”

There is some modest opening up of trade initially, but the government’s calculations seriously overestimate the benefits, he said.

“I say that because we’re selling all those tonnes of product somewhere in the world already and it’s only the increment in price that we could achieve from selling into the EU which is a benefit from the FTA and it’s nothing like the big number that the government has indicated.”

New Zealand would be able to sell cheese into the EU but its share of the market would be tiny, he said.

That was disappointing because while the European Union had about 15 percent share of the New Zealand market, New Zealand would only have about 0.14 percent of the EU market, Bailey said.

The EU deal was completely different from the trade deal New Zealand has with China because “it remains tightly constrained and the ability to grow will not be there beyond these quite small volumes”, he said.

In terms of use of trade names, Bailey said there was what is called grandparenting of some names which meant existing New Zealand users of the names could continue to do so.

However, this was not the case with feta cheese and New Zealand producers would no longer be able to call it feta.

“In the case of feta there will be a phase out, so that’s going to hurt.

“When we come to the conclusion that the meaningfulness in commercial terms of this deal is modest, we have to factor in what we lose there as well and that’s very hard to quantify, but overall it’s very disappointing.”

It was good that some other sectors such as seafood, kiwifruit and mānuka honey did well out of the deal, but the country’s “big engines for export growth still remain dairy and meat”, Bailey said.

“When we’re looking at how do we try and close the trade imbalance between New Zealand and the European Union which is heavily in their favour, you know circa $4 billion of exports from New Zealand versus $9 billion of imports from the EU into New Zealand, it’s really the big sectors that can close that gap and you know we’re the ones that have had a very very modest outcome.”

Meat Industry Association chief executive Sirma Karapeeva who is in Brussels for the negotiations said the deal falls far below the expectations of meat exporters.

“The very small quota that we have been allocated or given as part of this deal is only 10,000 tonnes and to put that in context the European market or the European consumers consume 6.5 million tonnes of beef annually, our 10,000-tonne quote equates to about 0.1 percent of that consumption.”

“I don’t see how that can be classified as commercially meaningful access or an access that has any growth opportunities going forward.”

Karapeeva paid credit to the New Zealand negotiators despite her disappointment at the deal’s outcome for beef and dairy.

The EU negotiators are very tough and have a different mindset to New Zealand’s negotiators and view trade from a very different perspective, Karapeeva said.

“I think our negotiators did an exceptionally good job of getting to this point, and having been on the ground for the last week or so I know that they have worked tirelessly, very long hours, very tough discussions to try and land this deal which in fact they have landed.”

Unfortunately, the European protectionist mindset was very firm and that could not be shifted, she said.