Trade Blog: the value of the World Trade Organization to NZ farmers

// International Trade

B+LNZ representative recently visited the World Trade Organization (WTO) as part of a wider trip to Europe. We dive into the value of the WTO to NZ farmers ahead of a WTO meeting in Abu Dhabi with agriculture a hot topic.

picture of trade officials

The World Trade Organization (WTO) is an important part of our global economic architecture, helping with increased collaboration among countries and establishing a rules-based international trading system.  

About the WTO and the Cairns Group  

Established in 1995, the WTO serves as a forum for member countries to engage in negotiations and resolve trade-related disputes, playing a pivotal role in promoting fair and open commerce worldwide. The significance of the WTO lies in its ability to discourage protectionism, enhance transparency, and provide mechanisms for the peaceful resolution of trade conflicts.  

As a small country reliant on revenue from exports to support our standard of living, the WTO has been crucial for supporting free and fair access for New Zealand red meat exports into our international markets. By actively participating in these forums, the New Zealand Government can advocate for reforms that align with our economic interests, promote fair competition, and contribute to global efforts in building a sustainable and equitable trading system.  

The WTO’s work is done by country representatives, therefore New Zealand’s interests are represented by the New Zealand Government. Beef + Lamb New Zealand (B+LNZ) works closely with the Ministry for Primary Industries and the Ministry of Foreign Affairs, who lead this engagement and support the New Zealand Government’s work on trade policy.  

Within the WTO, the Cairns Group holds a unique position, representing the interests of 20 major agricultural exporting nations. Countries such as Australia, Canada, and Brazil form part of this coalition, which advocates for the liberalisation of agricultural trade and the elimination of trade-distorting subsidies. For New Zealand, a key member of the Cairns Group, this stance aligns with our interests in promoting open and fair agricultural markets. This Cairns Group, as a group of likeminded countries, allows New Zealand to amplify our voice and work together to improve the global trading system for agricultural exporters. 

B+LNZ’s recent WTO visit 

In October 2023, B+LNZ’s CEO Sam McIvor and UK/EU Regional Manager Alex Gowen visited the WTO as part of a wider trip to Europe. The purpose of this visit was to support the New Zealand Government by demonstrating that our farmers are also passionate proponents of trade liberalisation – reducing tariffs on our exports and the amount of trade distorting subsidies that our competitors get. During this visit McIvor and Gowen met the New Zealand Ambassador to the WTO, Cairns Group members, the United States and Australia, African Country Group and the WTO Deputy Director General. These are members where New Zealand has shared interests, and McIvor and Gowen’s attendance supported the New Zealand Government’s priorities by demonstrating that New Zealand farmers are strong supporters of liberalised trade and reductions in agricultural subsidies. 

Trade subsidies and NZ agriculture 

New Zealand's economy is heavily reliant on agriculture, with the sector contributing significantly to the country's gross domestic product (GDP) and employment. As a major exporter of agricultural products, New Zealand has a keen interest in eliminating trade barriers and ensuring a level playing field for its farmers in the international market. While many countries subsidise their farmers, the New Zealand Government does not. This reliance on market forces to drive production has resulted in our agricultural sector being nimble and extremely efficient. Our farmers are able to quickly respond to consumer demand and maximise profits, rather than being reliant on continually producing the same thing to receive their subsidies. The Cairns Group's emphasis on reducing trade-distorting subsidies aligns with New Zealand's goal of fostering fair competition and securing access to global markets for its agricultural exports. 

The agricultural sector in New Zealand faces challenges related to other countries’ subsidies that distort global markets. Trade-distorting subsidies can create unfair advantages for farmers in other countries, leading to market imbalances and hindering the growth of New Zealand's agricultural exports. The Cairns Group's advocacy for subsidy elimination is crucial for addressing these challenges and promoting a more equitable trading environment for New Zealand farmers. 

Moreover, the issue extends beyond economic considerations to encompass environmental sustainability. New Zealand, like other Cairns Group members, recognises the importance of reforming subsidies that are environmentally harmful. Overproduction fuelled by subsidies can lead to environmental degradation, resource depletion, and contribute to climate change. As a nation with a strong commitment to environmental conservation, New Zealand has a vested interest in advocating for subsidy reform within the WTO to promote sustainable agricultural practices globally. 

Why NZ continues advocating for subsidy reform 

Reforming trade-distorting and environmentally harmful subsidies is imperative for New Zealand and the agricultural sector for several reasons.  

Firstly, it ensures that New Zealand farmers can compete on a fair and level playing field in global markets, enhancing the economic viability of the agricultural sector. Secondly, subsidy reform aligns with New Zealand's commitment to sustainable development and responsible environmental stewardship. 

In the context of the broader international community, the Cairns Group's efforts within the WTO contribute to the achievement of the United Nations Sustainable Development Goals (SDGs). By fostering fair competition and sustainable practices, subsidy reform supports the global agenda of creating inclusive and environmentally responsible economic growth. 

Next steps for the WTO 

Government Ministers from WTO countries are meeting in Abu Dhabi from 26-28 February with agriculture a key issue on the agenda.  

Little progress has been made in recent years, with many hoping this meeting will kick start advancements. B+LNZ is hopeful that progress can be made, particularly on addressing the amount of trade-distorting and environmentally harmful subsidies that our competitors receive. While a concrete outcome is unlikely this year, a start needs to be made so an agreement can be reached in the near future on this issue and put New Zealand farmers on an even footing with other countries.