Changing global trade ties
OPINION: I recently returned from a market visit overseas, including the United Kingdom and Europe. These are critical, historically important and increasingly high value markets for our red meat exports.
As Rural News went to press, Prime Minister Jacinda Ardern was in Brussels meeting with the President of the European Commission, Ursula von der Leyen. The meeting is a last ditch attempt to get agreement in principle to a deal, before politicians and officials in Europe head off on their summer holidays.
Rural News understands that the agreement is all but done except for one crucial element - 'commercially meaningful' access for NZ sheep meat and beef. Up until now, both sides are deadlocked on this issue. However, officials are hoping that the talks between Ardern and von der Leyen can break this.
At present, NZ doesn't have preferential access to the EU which is one of the largest global dairy markets in the world. At best, we have some WTO quotas to the EU that aren't used because the quota tariff rate is too high. The situation for beef is equally bad, with NZ only able to ship a mere 1,100 tones to the EU.
On the positive side, it's understood that if the FTA is signed, horticulture is set to be a major beneficiary with the kiwifruit sector in line to gain up to $40 million in reduced tariffs in the first year alone. Onion growers are also believed to be likely beneficiaries, with a figure of $10 million being touted.
It's clear that one issue NZ will not win on relates to what is known as geographical indications (GIs): products - for the most part cheeses - with a name linked to a specific region or even town. Examples are Feta, Gruyere, Gorgonzola and Gouda.
It has been pointed out to Rural News that any country that has completed an FTA with the EU has had to concede on GIs, so NZ is not being treated differently to any other country.
But assuming GIs are in the deal, negotiators are endeavouring to secure a transitional arrangement that would give NZ cheesemakers time to adjust cheesemakers time to adjust to the new regime.
Another big issue, seemingly already agreed to, is rules around sustainability. Both NZ and the EU are at one on this but what remains to be sorted is whether either party can apply sanctions if one or the other breaches environmental or labour related rules.
The stakes in the NZ/EU FTA are high for us. It would give us access to 450 million consumers many of whom are seeking high quality, sustainably produced food. The visit of Ardern and Trade Minister Damien O'Connor is hoped to put the pressure on Brussels to agree to a deal.
