Former Fonterra executive Guy Roper appointed DCANZ chair
A former Fonterra executive is the new chair of the Dairy Companies Association of New Zealand (DCANZ).
"New Zealand has pending trade deals coming up, for example a potential free trade agreement with the European Union," he says.
"The problem is when you do a poor quality deal in TPP you are not exactly establishing the sort of precedent you want."
But, dairy aside, overall it is a good deal for NZ, Bailey says, and should be supported.
Bailey told Dairy News he can only hope the commercial reality of market changes may mean some countries will realise that maintaining border protection doesn't make sense.
"We are still looking at a backdrop of world dairy demand exceeding world dairy supply over time," he says.
"We hoped out of this deal to see a significant lift in the amount of liquidity in world dairy trade -- that is more tonnes crossing international borders to try to [smooth] volatility. The big drop in prices has really hurt our farmers this year and anything that can mitigate that volatility over time has to be welcomed.
"It is a big disappointment because these other countries' farmers face that volatility eventually and we would have thought they would want to see a better outcome too.
"Without doubt a better outcome for dairy in TPP would have helped that volatility but it wouldn't remove it – that would be pie-in-the-sky thinking. But any increase in world trade would help mitigate that volatility."
He says there are definitely some gains for dairy but he is concerned about when there may be another opportunity to advance on these results. "This trade deal is a oncer," he says.
The TPP has to be ratified through the parliaments of every country but he has not heard that would be stumbling block. "Nothing can be taken for granted, including New Zealand. But a key thing a few months ago was the United States passing the Trade Promotion Authority which leaves their congress with a simple 'yes' or 'no' vote; they can't unpick the detail and say 'we like this bit but we don't like this bit' and try to change the deal. That would have been no good at all."
The timetable in the US is a lot longer, with a 90 day notification and another 90 days before the congress can deal with it.
But Bailey says he hugely appreciates the effort made by our negotiating team. "We are saying it was underwhelming
for dairy and it definitely was. But a huge effort was made over there by [Trade Minister] Tim Groser, [chief negotiator] David Walker and the rest of the negotiating team. They really put their bodies on the line for it. The odds were stacked against us and we did make the progress we wanted."
Bailey said he had been asked not to divulge any detail of the deal at this stage.
"But we have made it clear that according to our initial ambition to get new market access -- originally it was to see all tariffs being eliminated so there would be open access to markets -- we have ended up falling quite short.
"That is no criticism of our trade minister and his team because they worked really hard to get the best deal possible.
"We were just up against the odds in the people representing the dairy industries, particularly in the United States, Japan and Canada."
