B+LNZ CEO Sam McIvor said the trade agreement will deliver major gains to the New Zealand sheep and beef sector, despite the US’s withdrawal last year.
“Japan is New Zealand’s fifth largest market for red meat and co-products, with exports of over NZD302 million exports last year. Japan is the market in which the sheep and beef sector faces its single highest tariff burden. Last year the sector faced tariffs of NZD73 million on its NZD302 million exports, an average tariff of 24 percent – and money that would have trickled down to all New Zealand households. “
McIvor said the TPP11 had become even more important in recent weeks.
“On 1 August, Japan increased its tariffs on frozen beef from 38.5 percent to 50 percent under a WTO safeguard, which will apply until March next year. Australia, one of our largest competitors in the market, is not affected by the safeguard because it has an existing bilateral trade agreement with Japan. Australian frozen beef only faces a tariff of 27.2 percent, giving it a massive 22.8 percent advantage. This is already having a major impact on our exports, which were worth NZD79 million last year.”
MIA CEO Tim Ritchie said Australia is responsible for some 50% of Japan’s beef imports which have contributed to the trigger of the safeguard on frozen beef. There is a distinct possibility that a similar WTO safeguard may be triggered on chilled beef exports into Japan in the next few months which would further disadvantage the sector.
“Japan is New Zealand’s largest chilled beef market worth NZD63 million last year. Japan also concluded FTA negotiations with the European Union earlier this year, and agreed to give the EU similar outcomes on beef as in TPP. The Government’s negotiating mandate for TPP 11 will level the playing field and will ensure our exporters remain competitive in overseas markets.
“TPP would also deliver important gains in other markets such as Mexico and Canada, where our sheep and beef exports face tariffs ranging from 10 to 60 percent,” Ritchie said.
“Given the absolute importance of this initiative for our sector, we trust the leadership New Zealand has taken continues post the election,” McIvor and Ritchie said.
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