Tuesday, 24 November 2020 09:55

RCEP trade deal - no big gains for dairy

Written by  Peter Burke
Dairy processors say direct market access gains from RCEP will be "modest". Dairy processors say direct market access gains from RCEP will be "modest".

While the signing of the Regional Comprehensive Economic Partnership (RCEP) agreement last week is being hailed as a positive move, the reality is that its benefit to the dairy sector is limited.

 Dairy Companies Association of New Zealand (DCANZ) chairman Malcolm Bailey described the direct market access gains for the NZ dairy industry as “modest”.

There are 15 countries involved in RCEP: the 10 members of ASEAN – Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam; plus five of the countries with which ASEAN has free trade agreements, namely Australia, China, Japan, Korea and New Zealand. In trading terms, RCEP countries take over half of NZ’s exports.

Bailey says DCANZ welcomes something positive on the international trade front and says it’s been a tough time and is a good signal that countries are prepared to do trade deals, which will help aid the recovery from Covid-19.

“We believe that a more open market approach is part of the solution for economic recovery. But having said that, we are disappointed that India withdrew from RCEP,” he told Dairy News.

“We believe that was an area where there was real potential for improved market access for NZ and that India was the only country in the original RCEP group that we didn’t have a trade agreement with,” he says.

The official reason that India gave from withdrawing from the agreement was that it had concerns about the impact any trade agreements may have on its own agricultural sector. Malcolm Bailey says there appears to be some political concerns within India about the agreement, but he notes that there is a pathway for India to come back in to RCEP.

“All the projections relating to India show that with population growth, milk production and consumption, they will have a structural deficit and they will require more dairy imports over time. Interestingly, NZ doesn’t have a lot to spare given our commitments to many other markets, but as we look to the future, we think there is a place for NZ dairy in India.

“I say dairy – not just dairy exports – because there is the opportunity for cooperating on many fronts and the knowhow and technology can be shared,” he says.

Bailey says Covid doesn’t appear to have played any part in the conclusion of the RCEP agreement, as much of the negotiations took place before Covid became a factor. He says there is an active Indian Business Council in NZ and many companies do business with India.

“Earlier this year I was part of a trade mission to India, led by Winston Peters and David Parker, and so things are certainly going on there from a trade perspective. We have just got to continue engaging there at the right levels and look to see what we might do going forward,” he says.

Bailey says the RCEP agreement will result in some tariff reductions with Indonesia that were additional, which was good.

But he says elsewhere the dairy industry is relying more on some of the streamlined process that will make the trade easier and will address some of NZ’s concerns around non-tariff barriers.

More like this

Outlook hopeful - DCANZ

The chairman of the Dairy Companies Association of New Zealand (DCANZ) Malcolm Bailey says the industry appears to be in a strong position given what is happening in the world at present.

Trade deal delivers new 'rulebook'

A new trade agreement, the Regional Comprehensive Economic Partnership (RCEP), has been described as a new rule book for trade in the Asian region.

UK/EU trade scrap worries exporters

Britain's decision to break its deal with the EU over Brexit is creating uncertainty for NZ dairy exporters, according to Malcolm Bailey — chair of the Dairy Companies Association of NZ (DCANZ).

Featured

Covid minces meat prices

Farmgate red meat prices are taking a hit as Covid continues to disrupt dining out businesses around the world.

 

Not a very cherry start!

What was expected to be a bumper cherry crop this year has been badly hit by untimely wet weather.

Hort sector denied!

MPI has turned down a request from the horticulture sector to declare the recent hail and rainstorms, that decimated many orchards around the country and cost growers millions
of dollars in lost income, as an ‘adverse event’.

Pledge to end child labour in agriculture

The director-general of the Food and Agriculture Organisation of the United Nations (FAO), Qu Dongyu, has pledged to intensify efforts toward addressing child labour in agriculture through a dedicated work programme.

National

Expat workers ready for NZ

Dairy industry recruitment company Rural People Limited is seeing a huge increase in overseas interest to fill New Zealand farming…

Machinery & Products

Kubota ROPS tractors here

Kubota New Zealand product specialist Shaun Monteith says Rollover Protective Structure (ROPS) tractors make up 30% of all tractors in…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Dung paint

India now has its own cow dung paint, a world-first. 

Fresh for 60 days

A Queensland-based company is set to release its own production of milk this year that stays fresh for at least…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter