Saturday, December 2, 2023

Exporters keep wary eye on CPTTP moves in Japan

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With UK set to join, will NZ quotas in key market be trimmed?
MIA CEO Sirma Karapeeva said long-established connections and an understanding of the markets means the UK and EU remain important markets.
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Meat exporters are bracing for the impact on their lucrative beef trade with Japan from the United Kingdom joining the Comprehensive and Progressive TransPacific Partnership.

The UK was provisionally welcomed into the Pacific Rim trade deal after substantially completing negotiations with the 11 other member countries last month.

The reduction in tariffs on beef exports to Japan from 38.5% to 9% by 2033, was the biggest prize for New Zealand exporters from the Comprehensive and Progressive TransPacific Partnership’ (CPTPP) predecessor agreement, the TransPacific Partnership.

Since Japan’s ratification of the TPP, NZ’s beef exports to the country have jumped from $166 million in 2018 to $349m last year.

Meat Industry Association chief executive Sirma Karapeeva said of all the CPTPP markets where increased competition from the UK could arise as a result of its accession to the agreement, the Japanese beef market is the most important to NZ exporters.

The best outcome for NZ would be a new quota for British exporters to access the Japanese market.

Less desirable would be for NZ exporters to have their existing quota entitlements trimmed and redistributed to UK rivals.

“For us that would be the most interesting aspect – how has the quota been dealt with,” Karapeeva said.

Officials are yet to share that level of detail with exporters.

“There may have been some tweaks made to accommodate that and to mitigate some of the pressure. But until we see the details and are briefed on the outcomes I cannot say whether we are concerned or not.”

Aside from the potential for increased competition, Karapeeva believed the expansion of CPTPP to include the UK was a positive development for NZ exporters.

“It is a good indication that there are still countries out there that value the rules around international trade.”

The National Party’s trade spokesperson, Todd McClay, agreed that the expansion of the CPTPP should be welcomed.

But he said preserving gains for exporters from the original agreement should be a negotiating priority for the NZ government as more countries are added.

“If everyone is coming in then you negotiate better access with some of the countries that it was hard to get better access out of in the first place.

“Japan is an example and so is Canada.

“Yes, we want them to come in but Canada and Japan have got to liberalise more otherwise we will keep talking for a while.”

China, Taiwan, Ecuador, Costa Rica and Uruguay all have applications to join CPTPP pending.

Members currently are Japan, Australia, NZ, Peru, Malaysia, Brunei, Chile, Canada, Vietnam, Singapore and Mexico.

The parliaments of the existing members must pass legislation before the UK can formally enter the agreement and tariffs are reduced.

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