What is Trade Policy?
The Trade Policy team is responsible for B+LNZ’s trade policy and market access work. This involves monitoring developments on international trade, engaging with key stakeholders (including international contacts) and working with government to negotiate Free Trade Agreements (FTAs) and better access to our export markets. Trade policy refers to the regulations and agreements that cover international trade. This includes quotas, tariffs and non-tariff barriers (NTBs).
Why is it important?
New Zealand’s sheep and beef sector is export dependent. We produce more than our small population can consume, so we need to sell our products offshore. Currently 94% of New Zealand’s sheepmeat and 87% of beef production is exported. The export revenue from sheepmeat, beef and co-products was worth $9 billion for the year ending December 2018 and we export to over 120 markets around the world.
We owe our diverse range of export markets to the establishment of the World Trade Organisation (WTO) in 1995 and successive New Zealand governments negotiating a network of FTAs, as well as other access agreements that open doors for our companies. The WTO and FTAs have lowered the tariffs (i.e. taxes) imposed at the border for products exported by our sector, improved trading rules and levelled the playing field by establishing a common set of rules that govern global trade.
In some markets, tariffs can be so high that the cost of New Zealand product becomes uncompetitive so negotiating FTAs is essential to unlocking the potential of those markets.
New Zealand's network of FTAs covers 50% of our sector's global exports. However, the government is negotiating three new FTAs and when the Regional and Comprehensive Economic Partnership Agreement (RCEP), the Pacific Alliance and the EU-NZ FTA are concluded, 72% of New Zealand’s sheep and beef trade will be covered by FTAs.
New Zealand's network of FTAs in place saved meat exporters $350 million last year, but exporters still faced $250 million worth of tariffs.
There is also still significant work to do to reduce non-tariff barriers in the remaining export markets. Non-tariff barriers include opaque rules, arbitrary standards that are not based in science, customs and other import procedures that are slow, costly and excessive. Non-tariff barriers can be just as costly and prohibitive as tariffs and can be very difficult to address.
Where do we export to?
The sector exports to 120 countries around the world. See below for a snapshot of our top trading partners:
What are B+LNZ’s priorities?
B+LNZ works closely with the New Zealand government to support its free trade agenda. This includes providing analysis to the Ministry for Primary Industries and the Ministry of Foreign Affairs and Trade on the effects of any potential trade deal on the sheep and beef sector.
B+LNZ’s current priorities are:
- Brexit: Ensuring that New Zealand’s access to the European Union (EU) and United Kingdom (UK) markets for sheep and beef is not compromised due to the UK leaving the EU.
- EU-NZ FTA: Support the government on the negotiation of an FTA with the EU for better market access. Our current market access to the EU is through two WTO quotas established for sheepmeat and beef. Where New Zealand exports fall outside these quotas, they are subjected to a tariff of around 50% depending on the product. This means it is not financially viable to export product that falls outside of quota to the EU market.
- Current Trade Agenda: Support the government with other FTA negotiations which are ongoing such as Regional and Comprehensive Economic Partnership Agreement (RCEP), Pacific Alliance, AANZFTA, and the China FTA upgrade.
- Implementation: Helping the government to implement already negotiated agreements such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and PACER Plus.
- New opportunities: Support the government’s efforts to launch negotiations with new FTA partners – for example, with the UK and the US.
You can find links to our submissions and analysis here.
On 23 June 2016, British voters supported leaving the EU in a referendum. The referendum had a turnout of 71.8% (highest turnout since the 1992 General Election) and resulted in a 52% to 48% preference for the UK to leave the EU.
Consequently, on 29 March 2017, the UK Government invoked Article 50 of the Treaty on the European Union which provides for a two-year period in which that Member must negotiate the terms of its exit in a “withdrawal agreement’. The end of that two-year period was 29 March 2019, but this deadline has since been extended multiple times.
Brexit poses significant challenges to New Zealand’s red meat sector. The EU is an important market for New Zealand’s red meat and associated co-products, accounting for almost NZ$2 billion in trade in 2018.
Our sheep and beef trade to both the UK and EU are inextricably linked through quota access and both are likely to be affected as a result of the UK leaving the single market.
It is B+LNZ’s and the Meat Industry Association's (MIA) top priority to work with the New Zealand government to ensure New Zealand’s access to the EU and UK is protected during this transition. We will also be working hard to understand the wider impact of Brexit on the markets. B+LNZ and MIA will be using their representatives in the UK and EU to assist with this.
Strong trade relationships are underpinned by strong personal relationships and so B+LNZ engages with other international organisations representing sheep and beef sectors. Through these relationships we can share research and present a united view on matters affecting the global sheep and beef trade, and build greater understanding of each other’s farming systems, challenges and opportunities.
The International Beef Alliance (IBA) is made up of cattle producer organisations from Australia, Brazil, Canada, Mexico, New Zealand, Paraguay and the United States.
B+LNZ also enjoys a strong relationship with our American and Australian sheep farming counterparts. To find out more, visit the American Sheep Industry website or Meat and Livestock Australia website.
As part of our relationship with partner organisations, we offer scholarships each year to sheep and beef farming ambassadors. Please keep an eye on the B+LNZ website and our Facebook page for more information on these programmes.
Previous trade negotiations have resulted in New Zealand securing country specific tariff quota access for some meat products. This gives New Zealand exporters access to specified markets for fixed quantities of certain products:
- European Union – sheepmeat, goatmeat and high-quality beef.
- United States – beef and veal.
- Canada – beef and veal.
The European Union and United States quotas are managed by the New Zealand Meat Board.