Fonterra chairman John Wilson said the conclusion of the agreement was a “small but significant step forward for the dairy sector”.
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The head of the world’s biggest dairy exporter said he was “very disappointed that the deal falls far short” of its original ambition to eliminate all tariffs.
Beef and Lamb New Zealand and the Meat Industry Association (MIA) said the best possible deal for sheep and beef farmers was secured.
“TPP has been an enormous undertaking, ” Mr Wilson said, after returning from Atlanta.
Trade Minister Tim Groser had misled New Zealanders with claims that he would walk away from a bad deal, Kelsey said in a statement, referring to the meagre gains on access for New Zealand ‘s pillar dairy industry.
John says that the entrenched protectionism demonstrated by the U.S. dairy industry in particular had ensured that the deal failed to reach its potential.
He admitted dairy was one of the “most sensitive” issues that had to be resolved and talks went right down to the wire – wrapping up just four hours before the press conference announcing the deal.
“TPP members account for about 52pc of Australia’s beef, sheepmeat and offal trade and the existing import tariffs applicable to Australia’s exports destined for TPP markets represent an annual tax on the supply chain of around $1 billion”.
He said TPP would eliminate 98% of tariffs on Australian exports to TPP countries and create longer-term benefits for Australian farmers beyond those that can be achieved in a bilateral free trade agreement, particularly in the three countries Australia did not have agreements with: Canada, Mexico and Peru. That trade incurred about $94 million in tariffs a year ago.
The trade pact covers not only tariffs, but also a wide range of rules related to global corporate activity, such as investment, dispute resolution and finance.
Opposition from Japan, the United States and Canada was the stumbling block for dairy. While beef tariffs would not be eliminated, they would be lowered significantly.
“If this tariff relief was passed straight through to New Zealand growers, it would equate to savings of over $1000 for every hectare of kiwifruit grown in New Zealand“, Jager said.
“Once fully implemented, the TPP will see the import tariff applied by Japan reducing to 9 per cent while the elimination of tariffs by both Mexico and Canada within 10 years, this is an outstanding result”.
Zespri chief executive Lain Jager said most of the beneficial impact would be in Zespri’s biggest market, Japan, where the industry paid more than $15 million in tariffs past year.
Australian farmers were more positive on the agreement.
“While there are gains from tariff reductions in a few sectors, this agreement was always going to be judged on the value to our largest export sector, and on that score it has failed”.
Under TPP, the United States is establishing a new quota for Australia, with an option to raise that allotment in years when the domestic import need is greater, Vetter said.
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Australian Pork Limited Policy General Manager Deb Kerr said countries involved in the TPP were significant trading partners for the Australian pork industry.
