Kiwifruit's potential $26m-a-year windfall

Ministry of Foreign Affaris' chief negotiator Vangelis Vitalis and lead negotiator Martin Harvey say there are plenty of benefits to be had under a revised TPPA. Photo/ John Borren

Zespri and its growers could stand to gain $26 million on the first day of a revised TPP agreement as early as the end of next year.

Two of New Zealand's high-level trade negotiators visited Tauranga this week to offer exporters a presentation on the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP).

This includes reaping huge monetary savings as a result of the Government having levelled competition for international trade.

Ministry of Foreign Affairs and Trade deputy secretary, trade and economic group, Vangelis Vitalis addressed an eager crowd of about 50 at the Smart Business Centre in Chapel St. He was joined by lead negotiator Martin Harvey.

The revised agreement was made after the United States pulled out from the original, Vitalis said.

The new agreement has since removed 20 elements which had been of benefit to the United States and instead introduced new benefits, such as a 0 per cent tariff rate for the 11 remaining countries including New Zealand.

Currently, New Zealand kiwifruit exporters pay a 6.4 per cent tariff in Japan compared with Chile, which pays nothing.

"So if you're bidding for a contract with a supermarket, it is going to be that much harder to negotiate because you are going to have to cover that $6.40 per $100," Vitalis said.

"This will level the playing field."

Vitalis said Zespri had already worked out it would reap at least $26m in tariff savings on the first day of the agreement from Japan alone.

The eventual removal of tariffs, which could take up to 20 years, among the countries was something "very hard fought for" and would also help other exporters such as beef and wine businesses, Vitalis said.

However, not everyone was happy.

A man stormed out of the presentation shouting expletives after learning New Zealand remains open to being sued by another country under the agreement.

Vitalis said the clause was not great, but it was successful. They had narrowed the scope to potential lawsuits to such an extent; it would be extremely unlikely an attempt would be successful.

Zespri chief executive Dan Mathieson said the agreement was an excellent result for the industry, which was on track to more than double global sales to $4.5 billion by 2025.

"Exports are key to New Zealand's economic prosperity, and agreements like this are vital to securing our ongoing access and competitiveness around the world," he said.

"The kiwifruit industry accounts for around 18,000 fulltime and seasonal jobs, and a recent report from the University of Waikato forecasts an additional 29,000 new jobs in our industry by 2030 in New Zealand – these trade agreements underpin job growth in rural New Zealand."

Who is involved in the CPTPP?

New Zealand is joined by Australia, Singapore, Malaysia, Vietnam, Japan, Brunei, Canada, Mexica, Peru and Chile.

When could the CPTPP take effect?
As early as next year but more likely to be some time after that. The agreement first needs to be ratified before putting it in front of a select committee in Parliament.

Five key objectives that have guided negotiations

1. Generate a better standard of living for all New Zealanders by helping businesses succeed internationally and grow jobs and opportunities locally.
2. Safeguard the Government's right to regulate and decide what is best for New Zealand and our people.
3. Ensure that tangible benefits are delivered for Māori and that the Crown's obligations under the Treaty of Waitangi are in no way compromised.
4. Raise labour and environmental standards in the region and reduce the impact of unfair practices.
5. Create a set of uniform rules that provides certainty for businesses of all sizes – big and small – who export to CPTPP economies.