Saturday, December 2, 2023

All hands on deck to push EU on trade

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Dairy Companies Association of NZ chair Malcolm Bailey says Prime Minister Jacinda Ardern’s comments were a “gift” to the EU’s agricultural protectionists in the negotiations.
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The bulk of the pastoral industry’s leadership will touch down in Brussels this week as part of a last-ditch attempt to salvage worthwhile market access gains from trade talks with the European Union.

The Meat Industry Association, Beef + Lamb New Zealand and the Dairy Companies Association,will all be represented at either chief executive or chairman level or by both.

The delegation arrives as NZ negotiators go head-to-head again with their EU counterparts in an effort to get the outlines of a free trade agreement before Prime Minister Jacinda Ardern visits European capitals at the end of this month.

It is understood the EU has agreed to scrap moderate tariffs on kiwifruit and honey but continues to stonewall on market access for the key exports of meat and dairy.

Dairy Companies Association chairman Malcolm Bailey said the offer from the EU falls far short of what would be needed to increase dairy exports to the EU which historically have been very low due to high tariffs.

“What we are hearing is small volumes in terms of quota and [high] tariffs within those quotas.

“When we run the numbers we can’t see that they will be viable to use most of the time.”

Bailey said there was “momentum” on both sides to finish the talks before Ardern’s visit but that should be resisted if there is no improvement in the EU’s offer for key exports like dairy.

“We are not happy to conclude a deal based on what we see at this point in time.”

“We cannot support a deal that does not deliver to our commercial interests in that market.”

Sirma Karapeeva
Meat Industry Association

Meat Industry Association chief executive Sirma Karapeeva said it would be better for the Government to walk away from the talks than sign a substandard agreement and set a precedent for future trade deals.

“And we have made that point with the Minister [of Trade Damien O’Connor] in meetings with him.

“We cannot support a deal that does not deliver to our commercial interests in that market.”

Asked whether she thought the Government was prepared to walk away from a deal not in the industry’s best interests Karapeeva was equivocal.

“I cannot answer that question.

“I am confident in some of the negotiators that are leading the negotiation but I am not confident in the Europeans in the way they engage in trade negotiations.

“I am not confident that they will come to the party and strike a deal that is all that it set out to be.”

One trade-watcher and former negotiator said he “could not believe” the Government would conclude a deal with such a poor outcome for two crucial export industries like meat and dairy.

However he conceded there were pressures on the Government to sign an agreement with the EU even if it fell short of the ideal outcome for exporters.

Instead NZ would be demonstrating “solidarity” with Western security partners in the face of rising threats from China and Russia.

The source said it was notable Ardern would be attending a meeting of the NATO defence alliance during her European trip.

“We are in lockstep with Europe on Ukraine and we are increasingly in lockstep with the Americans in the Indo-Pacific.

“There is a dynamic in all of this which can play one of two ways.

“It can be used to demonstrate that we need something from our allies in the economic space which is the way they should be playing it.

“Or that the ties that bind us are so strong that we have to conclude all these arrangements to demonstrate our solidarity.

“I personally think that is the greater risk…that to demonstrate our impeccable Western credentials we just get ripped off again by protectionist Europeans.”

O’Connor is due to travel to Brussels at the end of the week.

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