Less red meat produced and available for export
Lower volumes from meat processing plants are impacting export returns for New Zealand red meat.
The WTO’s appeal body confirmed on November 9 that several Indonesian agricultural trade barriers are inconsistent with global trade rules.
Meat Industry Association (MIA) chief executive Tim Ritchie says these barriers have impacted on NZ beef exports to Indonesia, contributing to a decline of at least 80% since 2010 and costing the sector about $1 billion in lost trade.
“We welcome the [appeal] confirmation that Indonesia needs to act to bring these measures into conformity with global trade rules,” says Ritchie. “This reinforces the importance and value of the WTO in disciplining [countries that erect] pervasive non-tariff barriers that plague the industry.”
Beef + Lamb NZ chief executive Sam McIvor says the sector knows that taking a WTO case is costly in money and resources, and he congratulated the Government and officials for pursuing the case.
The decision upholds key findings of a WTO dispute settlement panel, which last December ruled in NZ’s favour, causing Indonesia to appeal.
NZ and the US brought the case in 2013 in response to a range of next-generation agricultural ‘non-tariff’ barriers applied by Indonesia to imports since 2011. These included import prohibitions, behind-the-border use and sale restrictions on imports, restrictive import licensing and a domestic purchase condition.
Minister for Trade and Export Growth David Parker says the WTO case illustrates the value that NZ gains from international trade rules. The last case NZ brought to the WTO challenged an Australian ban on our apples exports there.
Parker says these barriers affect opportunities for many NZ agricultural exporters, including producers of onions, apples and beef.
“This decision from the WTO’s highest dispute settlement body is an important result for our agricultural exporters and should pave the way to grow NZ exports to the Indonesia market.”
In 2010, before Indonesia began throttling imports from NZ, that country was NZ’s second-largest beef export market by volume, worth $180m a year, Parker says. But that trade subsequently plummeted by 85%. This case aims to secure more open and predictable access to Indonesia for our exports.
“NZ has a strong and mutually beneficial relationship with Indonesia, and this trade disagreement is only a small part of that broader bilateral relationship.
“Indonesia’s approach to these WTO hearings has been exemplary: the tone has been collegial and constructive. In the proceedings Indonesia also underlined the longstanding and mutually respectful relationship it enjoys with NZ and a desire to strengthen this important relationship.
“I look forward to working with my Indonesian counterpart over the coming months to finalise resolution of this long-standing trade issue,” says Parker.
