FAO and the World Bank estimate only 10 per cent of new demand can be met by new cropland, and only 20 per cent from better use of existing cropland using existing technology. The remaining 70 per cent must be met by technology and policy innovation, including trade and investment.
Innovative trade policy means putting to bed old issues such as export subsidies and tariffs. New Zealanders learned a generation ago that protection is the worst enemy of innovation and competitiveness, yet our agricultural sector still faces ludicrously high tariffs in a number of markets, notably Canada and Japan.
The way we do business is changing, as old models based on import/export give way to increasingly complex value chains and networks. Our farmers are supplying products into food processing and retail distribution around the world, as companies invest in offshore production and processing. The new trade agenda emphasises market integration rather than market access, with a focus on investment, supply chain connectivity, regulatory alignment and innovation.
Successive New Zealand governments have taken an active policy of looking ahead to negotiate trade agreements that will provide the rules-based trade framework that underpins a sustainable future for our agricultural sector.
The most high-profile current negotiation is the Trans-Pacific Partnership which, if successfully concluded, will shape the future environment for agribusiness in the Asia Pacific region.
The next cab off the free trade rank -- we hope -- will be the European Union. In a recent major trade policy speech, EU Trade Commissioner Cecilia Malmstrom said the EU needed "to deepen its Asia Pacific strategy" and singled out Australia and New Zealand as "important regional players" .
New Zealand is one of a handful of countries that does not have an FTA with the EU. Our trade arrangements are 30 years old and in some areas may leave New Zealand at a disadvantage. Many New Zealand exports still face barriers, at the border or behind it, which add costs, generate uncertainty or in some cases even make trade uneconomic.
There are also missed opportunities: Europe has 500 million consumers, who earn a lot, spend a lot and are interested in consuming the kinds of products and services that New Zealand produces best. In addition to supplying consumers directly, New Zealand companies are already engaging in strategic partnerships with European food processors, manufacturers and service providers. An FTA between New Zealand and the EU could offer significant opportunities to both sides to expand business in agriculture and food as well as technology, services (including tourism and education), niche manufacturing, research and investment.
It could also link European companies with partners in a country that is already deeply embedded in the economic architecture of the Asia-Pacific, offering dynamic new opportunities to both sides.
No trade negotiations are easy and each participant must be willing to explore issues of interest to the other parties. But an agreement between New Zealand and the EU would provide significant opportunities to consolidate the new global trade architecture, enhance the prosperity of both sides and support the resilience of the New Zealand agricultural sector.
* You can find further information at www.tradeworks.org.nz.
