Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
US President Barack Obama will now want to move fast on TPP, having resolved political issues to get the 12-country deal fast-tracked.
Jacobi says both Prime Minister John Key and Trade Minister Tim Groser have indicated the stage reached on dairy so far in negotiations is not attractive enough for NZ.
“From what we know of negotiations we understand there has not been any meaningful discussion on those dairy issues between the United States, Canada and Japan and that’s got to happen,” Jacobi told Rural News. “That means we still have quite a bit of hard negotiating to do.
“One risk is that the Americans, having sorted out their own backyard, will now be telling everybody to get on with it as quickly as possible and will be bringing a lot of pressure to bear with negotiations. We will just have to stand tough for a deal which meets our interests.”
Others will also have products – such as sugar, textiles or beef – they want a good deal for. The NZ team will have to make sure everyone stands together on those deals.
“NZ will not have a lot of strength on its own; that is why we will need to rally the others. All of them have market access issues they want to be dealt with as well,” Jacobi says.
“Clearly if we were just negotiating by ourselves it would be complicated. This is a little better but I don’t underestimate the difficulty and we will have to see where that process takes us.”
The deal could be done by the end of the year, but this depends on the negotiating process. The Americans will want to finish it but our Government has been clear it will only sign up to a high quality TPP that delivers overall benefits for NZ. “It’s not after a deal at any cost,” says Jacobi.
Trade Minister Groser says dairy remains one of the most sensitive issues in the TPP negotiations. “While good progress has been made, further work is required to ensure the end result is acceptable to NZ and aligns with the objectives Leaders have set for TPP,” he told Rural News.
Transparency will assist public debate
More openess on some aspects of the Trans Pacific Partnership negotiations would help the public debate, says NZ International Business Forum executive director Stephen Jacobi.
It would also help the public understand the Government is trying to do its best in a complicated area, he told Rural News.
“It is difficult for the Government to negotiate in public. I wouldn’t be advocating that and I wouldn’t be advocating that the text for negotiations or the market access schedules be released – that would run the risk of making the negotiations too complicated and too difficult to conclude,” he says.
“But the Government could be more open about background information on the negotiation, how it is being negotiated, what is under negotiation, what the process is and how it might be ratified.”
