New Zealand meat, dairy exporters disappointed with FTA

New Zealand meat and dairy exporters have expressed disappointment with the free-trade agreement Prime Minister Jacinda Ardern has secured with the European Union.

The outcomes for dairy, New Zealand's biggest export, are very disappointing and reflect the degree of protectionism that continues to afflict dairy trade globally and particularly amongst the EU dairy industry, Fonterra Cooperative Group said in a statement Friday. The Meat Industry Association said the deal will only see a small quota for New Zealand beef in the EU, which fell well short of expectations.

The FTA was overnight in Brussels, where she and Trade Minister Damien O Connor lobbied to get an agreement over the line four years after negotiations started. Ardern said that it was a strategically important and economically beneficial deal that comes at a crucial time in our export-led Covid 19 recovery. It delivers tangible gains for exporters into a restrictive agricultural market. The FTA estimates that New Zealand export revenue to the EU is expected to grow by up to NZ $1.8 billion $1.1 billion annually by the year 2035.

It will secure duty-free access on 97% of New Zealand's current exports to the EU, with over 91% being removed the day the FTA comes into force. On the basis of tariffs, exporters will save about NZ $110 million per annum.

With immediate tariff elimination of those goods, the kiwifruit, wine, m nuka honey and seafood industries appear to be winners.

The meat association said the deal would allow a quota of just 10,000 tons of New Zealand beef to be added to a market that consumes 6.5 million tons annually.

While the FTA will give some small pockets of access for certain products over time, commercial opportunities for products such as butter, cheese, milk powder and key proteins are limited due to the size of the EU market. O Connor said the deal could deliver up to NZ $600 million in additional annual export revenue when the agreement is fully in effect, and that the government fought hard for our dairy and beef exporters.

He said that we have secured better access for our butter and cheese producers, some of which will now be able to trade with the EU for the first time in many years.

The New Zealand Specialist Cheesemakers Association said the country has bowed to EU pressure and given way to key cheese names.

The loss of the name Feta, which will be phased out over the next nine years, was a concern, said Daniel Shields, board member. Europe has succeeded in including the right to restrict new names at a future date, he said.

It is not known when the FTA will come into force. Both parties must complete domestic legal processes and ratify the agreement, which could take several years.

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