Dairy processors welcome GCC free trade deal
New Zealand dairy processors are welcoming a new free trade deal with the country’s second largest market.
Kimberly Crewther's comments come at a time when there is heightened activity around trade issues with Trade and Export Growth Minister Damien O'Connor making several overseas visits to help boost trade, and the National Party saying they want to obtain more trade with India.
For the past week, O'Connor has been in the UK meeting with Commonwealth Trade Ministers and then heading to the OECD in Paris where he's the vice chair of the Ministerial Council. Against this background is the ongoing economic war between the US and China and the war in the Ukraine, all of which are disrupting global trade.
Crewther says dairy remains one of the most protected sectors in global trade, due to both tariff and non-tariff barriers.
She says DCANZ estimates that NZ dairy exporters have access to just 12% of global dairy consumption at tariffs of less than 10% or without encountering a significant non-tariff barrier.
She says the UK FTA is an important trade milestone, removing tariffs on all dairy products over a short period, and it's pleasing to have this agreement now in place.
"The EU agreement is tracking towards signature, but for dairy, this did not have the same quality of outcomes as the UK agreement.
"The market access opening is more incremental and will mean the EU market remains mostly shut to New Zealand dairy exports.
"It is important that efforts continue to have dairy access into the EU, and also Canada and Japan, match the quality of the UK outcomes. The UK has demonstrated the kind of trade liberalisation that should be possible for all G7 members," she says.
Crewther says it's important that NZ continues to seek new high quality and comprehensive agreements with other markets, such as India.
DCANZ sees significant potential for our dairy products to play a complementary role to domestic supply in the Indian market, and a comprehensive trade agreement should be a priority.
"We believe that efforts to secure one will be supported by broader deepening of the bilateral relationship, as suggested by the New Zealand Indian Business Council. They have said that there is significant potential to make progress in that regard," she says.
But it's a well-known fact that trade agreements come about because of a broader bilateral relationship - sometimes sparked by special people and friends.
A classic example of this was the role played by the famous NZ born writer and activist Rewi Alley who lived in China 60 years and who was well connected to Chinese leaders. Many credit his personal links with the Chinese government as being instrumental in the opening of that market for NZ in the 1970s. In essence it was the relationship that helped trigger the trade.
Crewther says China remains an important market for the NZ dairy industry, which is supported by a high-quality FTA.
She says it's a market that continues to value high-quality, sustainably-produced NZ dairy products, and which does not impose trade restrictive trade barriers on our exports.
