EU’s Free Trade Agreement ‘not credible’ and offers ‘unlevel playing field’ for New Zealand trade

10-Jun-2020 - Last updated on 10-Jun-2020 at 09:41 GMT

Photo: Beef + Lamb New Zealand (B+LNZ) a

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Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) are ‘deeply disappointed’ with the recently leaked agricultural offer from the European Union (EU).

The news comes ahead of the 8th round of EU-NZ Free Trade Agreement (FTA) negotiations which are currently underway.

Leaked details

B+LNZ and the MIA support Trade Minister David Parker’s recent comments that it is unacceptable for New Zealand exporters to continue to face an unlevel playing field in the EU.

While the EU has repeatedly stated its ambition for a comprehensive and high-quality trade agreement, the quality of the leaked details suggests the EU has made no effort to follow this statement through with action.

Sam McIvor, CEO, B+LNZ, claims the leaked details suggested the EU’s market access offer to New Zealand would maintain small quotas with in-quota tariffs.

“The leaked details suggest the EU intends to continue to promote agricultural protectionism. This negative signal to trading partners is extremely disappointing, considering recent statements made by the EU Commission that spoke of the importance of trade liberalisation and openness, particularly in a post COVID-19 world,” he said.

“While New Zealand and the EU have a long history of trade, we are one of the few countries that does not have an FTA with the EU, putting us at a significant disadvantage compared to the EU’s FTA partners.”

Tariff rate quota

Additionally, New Zealand’s current beef market access to the EU is severely constrained by a tariff rate quota (TRQ) of 1300 tonnes with an in-quota tariff of 20%.

Exports outside of this quota are subject to tariffs of 12.8% of the value and between €171.3 and €311.8 per 100kg – effectively this can add up to a 50% tariff.

Sirma Karapeeva, CEO, Meat Industry Association, added the small quota and high out of quota tariff makes it difficult, if not impossible, for companies to form commercially meaningful relationships and build a stable trade in beef to the EU.

“It is not credible for a trading partner, like the EU, which purports to be a champion of free trade, to maintain small quotas and high tariffs. This not only makes commercially meaningful access impossible but continues to perpetuate agricultural protectionism and makes a mockery of the idea that this deal can be concluded this year,” he said.

“Following the outbreak of COVID-19, we were encouraged that the EU issued a statement recognizing that an open trade policy will need to be part of any future economic recovery plan. The leaked details do not support this rhetoric.

“B+LNZ and MIA support the New Zealand Government’s efforts to show leadership in uniting the international trading community by strengthening the rules-based system and trade relationships as New Zealand and the global economy seek to recover from COVID-19.

“Global agriculture and food trade will play an important role in the global recovery, and this is an opportunity for the EU to show genuine leadership on these issues in collaboration with partners like New Zealand.”