NZ red meat sector 'deeply disappointed' by EU free trade deal

Source: 1News

Those in New Zealand's red meat sector say they've been left "deeply disappointed" by Aotearoa's historic free trade deal with the European Union.

The deal will see tariffs for wine, manuka honey, onions, apples, almost all seafood and other horticulture products eliminated – saving New Zealand exporters $110 million every year.

It means there could be a $1.8 billion increase in export revenue for New Zealand per year.

But Meat Industry Association chief executive Sirma Karapeeva said negotiations had left those in the red meat sector with a "very, very small quota" of 10,000 tonnes total in its third largest export market.

READ MORE: NZ secures historic free trade deal with European Union

For a market which consumes 6.5 million tonnes of beef annually, Karapeeva said the 10,000 tonnes represents just 0.1% of the EU's consumption, "which is nothing".

"The deal that has been struck today, unfortunately for us, it represents the reality of negotiating with a grouping like the EU which have a somewhat different perspective about the meaning of free trade than what New Zealand does," she remarked.

The Government said new quota opportunities for the dairy and red meat sector would be worth more than $600 million in annual export revenue once fully implemented in seven years.

It said there would be an eight-fold increase in beef access to the EU market - New Zealand's existing beef quota is around 846 tonnes with an in-quota tariff rate of 20%.

But Karapeeva said the sector felt "let down" as more couldn't be extracted from the market for the benefit of its companies, farmers and New Zealand itself.

Meat processing.

"We are the largest manufacturing industry in New Zealand, supported by 25,000 people, and employment throughout New Zealand, and without access to lucrative markets we're putting pressure on a lot of other markets to earn those critical export dollars to continue employing our people and continue to bring in money to the New Zealand economy."

Beef + Lamb New Zealand chief executive Sam McIvor said in a statement it is difficult to understand why a more ambitious outcome wasn't possible, given the sector's been exporting its products there for more than 100 years.

"EU consumers are discerning and willing to pay a premium for high quality, sustainable product that meets superior animal welfare standards. This was a real opportunity to return better prices to both companies and farmers, but unfortunately this outcome will limit our ability to respond to that demand," he said.

"While we acknowledge the hard work of our New Zealand trade negotiators, frankly speaking, the EU has not supported their consumers and failed to live up to their rhetoric of being free traders."

Deal 'slap in the face' for farmers

Federated Farmers said in a statement the trade deal was a slap in the face for Kiwi farmers.

President and trade spokesperson Andrew Hoggard said the very small quotas agreed to are "considerably worse than we expected".

He said it was "miserly" that after seven years New Zealand's other meat and dairy products will have access to just 0.14% of the market.

"This is a free trade agreement in name only."

Dairy companies left 'disappointed'

The Dairy Companies Association of New Zealand said it is disappointed the trade deal leaves the EU market 98.5% closed to key New Zealand dairy products.

"The combination of very small quota volumes relative to the market size and trade restrictive in-quota tariffs has this deal falling well short of being commercially meaningful for the dairy industry," its chairman Malcolm Bailey said in a statement.

Government denies it's let sector down

Trade and Export Growth Minister Damien O'Connor acknowledged on Breakfast those in beef and dairy had aspirations of higher volumes.

He denied the Government had let the sector down.

"Look, they had 1100 tonnes in beef with a 20% quota into the EU market. We've now gone to 10,000 tonnes and we've reduced that to 7.5% which means there are real commercial opportunities for people shifting high-value beef into this market and they'll make really good money out of that," O'Connor said.

"Yes, the volumes have been low, and this is a protectionist market. We've lifted that over eight times and so that's opportunity for them and this is worth tens of millions of dollars."

Asked if the free trade agreement will make a meaningful difference to the sector, O'Connor remarked the meat industry don't have enough product to fill all of the market opportunities.

"They'll be able to choose where best to place the meat. So this is one more opportunity for them. It doesn't guarantee success, that's up to them."