NZ, Australia face tariff fight

New Zealand meat exporters face a new trade fight after South Africa's boost to already high tariffs on imports of New Zealand beef and lamb.

At present, New Zealand meat faces a tariff of 40 per cent, but South Africa has imposed an additional levy of two rand (about 40c) a kilogram.

So far this export season, New Zealand has sent 3189 tonnes of sheepmeat and beef to South Africa, compared with 6000 tonnes at the same point last year.

Similar increases have been set against meat sent from Australia, where federal Trade Minister Mark Vaile has written to his South African counterpart demanding an explanation for the move.

South Africa has claimed Australian mutton producers are deliberately under-invoicing their exports to avoid the tariff. Australia has rejected the claim, and Vaile has directed Australian trade officials to review the decision in case it breaches World Trade Organisation (WTO) regulations.

Just 18 months ago Australia and New Zealand won a drawn-out battle with the United States over American tariffs on imported lamb and the WTO forced the US to cut its tariffs.

South Africa is one of Australia's most important mutton markets, with sales worth more than A$31 million ($35 million) last year.

Last month South African Trade Minister Alex Erwin told Vaile at a meeting in Europe that the sheepmeat tariff would not be increased.

Vaile said he was seeking urgent talks with Erwin to discuss the apparent backflip by South Africa to increase the tariff.

"We're very disappointed to learn of South Africa's decision to increase the tariff rate for the importation of sheepmeat," he said.

"This will have serious consequences for the Australian sheepmeat industry.

"The decision to introduce a new specific tariff may increase the effective rate of tariffs for all imported red meat."

Vaile said he was disappointed by South Africa's actions as it was a member of the free-trade Cairns group of nations.

"Department officials will be looking at the decision to see if it breaches any WTO rules," he said.

There are fears the decision could also flow on to beef exports.

Sheepmeat Council of Australia vice-president Lance Gillespie said the decision was disappointing to the industry.

- NZPA