Meat row erupts in trade to China

By FRAN O'SULLIVAN and LIAM DANN

New Zealand's $130 million meat trade with China is in jeopardy after Beijing authorities passed only four of 41 plants as of export standard just one week from the new killing season.

Trade Negotiations Minister Jim Sutton said yesterday Beijing had confirmed that after October 31 it would not admit meat from any New Zealand plants not registered by its own inspectors.

The New Zealand Food and Safety Authority will go to Beijing next week to try to satisfy Chinese "technical concerns" and pave the way for another 10 plants to be approved.

Sutton hopes another 27 plants will be passed if the Chinese accept New Zealand official guarantees that they meet "comparable standards".

"The fact that they are indicating that if the authority gives guarantees of comparable standards they will be registered without inspection is a major breakthrough," said Sutton.

"I take it as a strong indication that they are working with us in good faith."

The meat row comes a month before China and New Zealand are due to formally announce the beginning of free-trade negotiations at the Apec leaders' meeting in Santiago.

"The setback will not scupper the free-trade talks," said Sutton. "It's slow working with China.

"But the two topics will work their way into the same conversation, I dare say - if necessary."

The meat industry will hold an urgent conference call today to gauge the impact of the Beijing announcement.

Meat Industry Association chief executive Caryll Shailer said the seriousness of the situation was still unclear. But she would not say which companies would be most severely affected.

"We are seeking data that will enable an accurate assessment of the potential trade impact," said Shailer. "That will be known in the next few days."

Sutton acknowledged that some companies were more exposed than others.

"Some have relied entirely on unregistered plants, but we are going to be doing what we can."

Affco chief executive Tony Egan confirmed his company was involved.

"Everyone is affected."

Shailer was optimistic that meat companies with valid permits already in place would be allowed a transition period in which they could continue exporting.

No new permits would be issued from November 1 but it was understood that valid permits - which could have time or tonnage limits - would still be honoured.

Sutton said: "The Chinese are going to continue to honour import permits that are issued before October 31, which will remain valid for six months ...

"There is a lot at stake - 36,000 tonnes were exported in 2002/2003. It's a market that is going to require careful development.

"Our hope is that the remaining plants can be registered as soon as possible."

It was unclear last night how many exporters had existing permits.

Shailer said the industry would have a clearer picture of the potential trade impact at the weekend and would then be better placed to comment.

Meat company PPCS chief operating officer Keith Cooper said the situation was "a complication rather than a crisis".

PPCS exported a significant amount to China but generally lower-value products. He said it was not like being shut out of Europe.