A meat industry leader says New Zealand should not be afraid to sue its trading partners if that is what is needed to stamp out non-tariff measures costing exporters $1.5 billion a year.
The plea came after new research commissioned by the Meat Industry Association (MIA) and Beef + Lamb NZ (BLNZ) calculated the cost of non-tariff measures to the NZ meat industry for the first time.
The $1.5bn identified in their research dwarfed the annual cost of tariffs to the industry of $193m last year.
Non-tariff measures hindering trade include everything from restrictive shelf-life limits for chilled meat exports to the costly but unnecessary rubber-stamping of documentation at local consulates before exports can leave the wharves.
When converted to a tariff-rate equivalent, the study found, the cost of these non-tariff measures to the NZ meat industry is equal to a tariff of 18.7% on all meat exports – double the global average.
MIA chief executive Sirma Karapeeva said NZ’s numerous free trade agreements weren’t just designed to cut tariffs on exports – they also contained the means to tackle non-tariff barriers to trade.
“There are a whole bunch of other provisions that set up administrative or bureaucratic systems to bring these issues to light and compel agencies and governments to work together to resolve them.”
Those agreements also often include the right to sue trading partners should they use non-tariff measures to block trade.
NZ recently became the first country in the 11-country Comprehensive and Progressive TransPacific Partnership trade agreement to sue another member country, when it launched a case against Canada for failing to uphold its obligations to increase access to its consumer market for NZ dairy products.
Karapeeva said NZ should not be afraid of escalating disputes this way more often if that is needed to unblock trade.
“I am not suggesting we jump to that straight away but what I am suggesting is that we need to have a good look at are we using all the mechanisms that we have negotiated in those trade agreements to shift some of these trade barriers?”
BLNZ chief executive Sam McIvor called on the government to “leverage all aspects” of its trade agreements “to the fullest extent”.
He said the proliferation of non-tariff barriers should be seen in the same light as the recent surge in farming costs.
“With on-farm inflation almost double that of general CPI, and average farm profits in the sheep and beef sector forecast to fall 30% this year, these are not insignificant costs that can be ignored.”
The research, carried out by economics consultancy Sense Partners, showed the cost of tariffs to the meat industry fell from $366m in 2010 to $193m last year as more trade agreements came into force.