Friday, April 19, 2024

Beef wary of EU’s new forestry rules

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Seeking assurance deforestation regs won’t erode FTA gains.
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Trade Minister Todd McClay has sought assurances that New Zealand beef exporters will face the lowest possible compliance obligations when it comes to new rules designed by the European Union to fight global deforestation. 

The EU passed regulations last June requiring exporters of a limited range of commodities to prove they have not contributed to global deforestation since the end of 2020. 

Exporters to the 27-country bloc must comply or risk fines equal to 5% of their global turnover. 

The EU has previously indicated exporters’ reporting obligations would depend upon their country’s relative contribution to global deforestation. Exports from lower risk countries would face lower reporting requirements.

However, with a looming deadline for compliance by the end of this year and with further detail yet to emerge, concerns among NZ exporters have been mounting.

At least one major exporter fears the rules could bring NZ’s limited beef trade with the EU to a screaming halt. The market access gains for beef farmers from NZ’s free trade deal with the EU are also at risk.

The exporter said it would be impossible to provide the data required for every single piece of beef entering the EU if NZ was classified as high risk. 

He said the industry is simply not set up to provide that volume of data.  

McClay conveyed these concerns to his European counterpart, EU Trade Commissioner Valdis Dombrovskis, at last month’s World Trade Organisation ministerial meeting in Abu Dhabi. 

“I made it clear that I thought that NZ was very low risk and that we would want to work with them to ensure that there was no cost imposed on NZ exporters.

“He was understanding of that and assured me that they were still working through the details and that NZ was not a problem, but we will reinforce that to them.”

McClay said he does not believe NZ is among the intended targets of the regulations. 

“They have got to work it out for themselves but I think they will use a risk profile which says some countries will need a higher level of certification because there is a higher risk of deforestation.”

McClay stressed to Dombrovskis that it was illegal to cut down native forest in NZ without good cause and his expectation was that this would be reflected in the risk classification imposed by the EU.

“That is an equivalent if not a higher standard than happens in the EU.”   

McClay said while the EU is still working out the details, his expectation is that exporters will be able to meet their obligations without being forced to generate additional data as some fear.

“I would expect a regime where there is no additional burden upon exporters to prove anything at all individually or collectively because the NZ government is able to give that assurance and we are making that case to the EU now.”

Dombrovskis had given no indication when the risk classifications for individual countries would be published.

However, McClay said he expected the implementation of the new rules would be delayed beyond the end of this year if the EU was unable to provide details of how they would work in time. 

McClay said he expects to travel to Brussels in the next few weeks to continue to press NZ’s case at the European Commission for a low-risk classification for its beef exports to the EU.

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