New dawn for primary exporters

After years of negotiations, false starts, street protests, the US withdrawing and even a new name, NZ primary product exporters are set to benefit soon from a controversial, multi-country free trade deal for the years ahead.

Trade and Export Growth Minister David Parker last week announced that the Comprehensive and Progressive Trans-Pacific Partnership trade deal (CPTPP) will enter into force on December 30 for NZ, Australia, Canada, Japan, Mexico, and Singapore now that six nations have ratified the trade pact.

“It’s been a long and sometimes bumpy road to achieving a Pacific Rim trade deal, but New Zealand producers and our economy will soon reap the benefits,” Federated Farmers president Katie Milne says.

“The required six nations have now ratified the 11-nation CPTPP and the countdown has started towards the first round of tariff cuts early next year.

“Federated Farmers has said from the outset that a Pacific Rim agreement would be a major boost to our ability to trade and New Zealand’s future prosperity, as well as a useful antidote to the economic protectionism brewing in some other parts of the world.” 

Milne says the deal is particularly good news for NZ beef farmers and horticulturalists, but she believes the potential to develop new technologies and economic partnerships while reducing business costs will be beneficial to Kiwis working in all industries.

She says the CPTPP is NZ’s first free trade deal with Japan – the third largest economy in the world – and immediately removes the tariff advantage that Australia’s beef producers have benefited from at NZ red meat farmers’ expense.

“Federated Farmers congratulates the New Zealand negotiators who have doggedly pursued this deal,” Milne said.

Agriculture Minister Damien O’Connor says NZ kiwifruit, beef and wine producers will benefit most from the CPTPP, along with smaller agribusinesses mussel farmers and cherry growers. 

“The CPTPP will, for the first time, provide us with preferential access to the world’s third-largest economy, Japan, and fellow G20 members Canada and Mexico,” O’Connor said. “It places our primary sectors on equal footing with exporters in other countries with lower tariffs in these markets.”

O’Connor says NZ kiwifruit growers will be $26 million better off as tariffs disappear on produce to their biggest market, Japan, and this will level the playing field with Chile which has duty free access to the Japanese market. 

“The CPTPP will also immediately remove Australian beef exporters’ current tariff advantage over New Zealand in the Japanese market. This has been costing our red meat sector millions in potential revenue,” he added.

O’Connor says NZ wine producers will gain immediate duty-free access to Canada, our fourth-largest wine market. 

Meanwhile, the removal of the buttercup squash tariff into Japan is expected to save a total of $1.5m a year, with an extra $19,500 a year in tariff savings for each of the 90 commercial growers of onions exported to Japan.

NZ special agricultural trade envoy Mike Petersen has also welcomed the deal getting over the line.

“There are four new trade agreements for NZ in CPTPP in the fastest-growing region on earth,” he commented. “It’s a fight-back against protectionist sentiment and a great day for NZ. Well done to all involved over many years.”