Since 2015, Australia's beef exports to Japan had risen by $1 billion while New Zealand's trade has fallen by $30 million. Picture / Amos Chapple
Since 2015, Australia's beef exports to Japan had risen by $1 billion while New Zealand's trade has fallen by $30 million. Picture / Amos Chapple
Beef and Lamb NZ says the revamped TPP trade deal will help to redress an imbalance in the beef trade that has given Australian producers a hefty advantage in the lucrative Japanese market.
The farmer-funded organisation, along with the Meat Industry Association, said they welcomed the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), negotiated to replace the TPP which fell over when US President Donald Trump withdrew support.
Beef and Lamb chief executive Sam McIvor said the conclusion of the agreement was good news for sheep and beef farmers.
"The sector understands there have been no changes to the original market access conditions which will open multiple markets in Japan, Mexico, Peru and Canada where New Zealand red meat faces tariffs of up to 50 per cent," he said.
Japan has been an important market for New Zealand beef producers but Australia, which signed a free trade agreement with that country in 2015, has enjoyed a considerable advantage over other beef producers.
Since 2015, Australia's beef exports to Japan had risen by $1 billion while New Zealand's trade has fallen by $30 million.
Japan has also had a "safeguard" policy which would have seen the tariff on New Zealand beef go from 38.5 per cent to 50 per cent by March 31 this year.
At the same time, Australian tariffs for chilled beef were 29 per cent for chilled and 27 per cent for frozen.
"They [Australian producers] have had a massive advantage in the market and we have been losing market share hand-over-fist," he said.
US producers - who were also keen to gain improved access to the Japanese market - would not enjoy the same advantages afforded under the new trade deal.
Under the new deal, beef tariffs to Japan will reduce gradually over next 15 years, from 38.5 per cent to 9 per cent.
In the much smaller market of Mexico, beef tariffs - currently at 25 per cent - will be eliminated over the next 10 years.
Meat exports are expected benefit from a revamped TPP trade deal. Picture/Supplied.
Tariffs on sheepmeat exports to Mexico - currently at 10 per cent - will be gone in 8 years.
New Zealand exports 85 per cent of its beef production and 95 per cent of its sheepmeat production.
McIvor said the new deal comes at a time of robust market conditions for New Zealand sheepmeat beat and beef in key world markets.
"This government has managed to pull off something pretty jolly quickly. They have done well to nail it," he said.
Tim Ritchie, chief executive of the Meat Industry Association, said the deal would open up opportunities.
"The CPTPP will put New Zealand on a level playing field with other major red meat exporters in the Asia Pacific region, such as Australia and the European Union – especially in Japan where the sector has already lost significant market share," he said.
During the recent negotiations, officials resolved the outstanding issues and have agreed to meet in Chile to sign the agreement on March 8.
Earlier, Prime Minister Jacinda Ardern welcomed the breakthrough in the revised TPP after talks in Tokyo.
The Dairy Companies Association of New Zealand (DCANZ) also welcomed the new deal.
"It's pleasing to see deal on CPTPP come together," said DCANZ chairman Malcolm Bailey.
"While the agreement does not go as far as we would like in terms of dairy access, there are some useful gains in markets such as Japan and Mexico," he said.
"CPTPP market access outcomes are also critical to avoid New Zealand dairy exporters ending up at a tariff disadvantage in key markets, including Japan," he said.
The New Zealand International Business Forum (NZIBF) also welcomed the new deal.
Stephen Jacobi, executive director of NZIBF, said the deal "comes not a moment too soon for New Zealand in Japan where our trade interests have suffered because we lack the sort of trade arrangements that our competitors enjoy".
