Wellington (Reuters) – Farmers who raise dairy, sheep, and beef in New Zealand are mostly unhappy with the new free trade agreement between their country and the European Union. They say it doesn’t give them much new access to the lucrative markets for meat and dairy.
The agreement, which has been in the works since the middle of 2018, will get rid of tariffs on a wide range of products. It will also be the first deal made by the EU that includes possible punishments for breaking environmental or labour standards.
Tariffs on EU exports like clothes, chemicals, pharmaceuticals, cars, wine and sweets will go down. The EU will increase its quota of New Zealand beef by 10,000 tonnes, which is a sensitive issue for France. The EU will also increase the amount of lamb, butter, and cheese it buys.
The New Zealand government said that the agreement brings real benefits to a market that is hard to get into.
But New Zealand’s meat and dairy industries say this won’t have much of an effect on them.
Simon Tucker, who is in charge of trade at Fonterra, the world’s largest dairy company, said in a statement that the results for dairy were very disappointing and showed how much protectionism is hurting the dairy trade around the world.
Tucker said that the size of the market made it hard for the FTA to open up new business opportunities for dairy products.
In a separate statement, Sirma Karapeeva, the head of the Meat Industry Association, said that the FTA did not give meat exporters access that was good for business.
“With more volatility in the world’s markets, it’s important to diversify, and a good FTA with the EU was key to helping us do that,” she said.
Agriculture exporters from New Zealand have had trouble getting good access to the market for a long time, so analysts say the result shouldn’t have been a big surprise.
“Negotiating a deal with one of the world’s most protectionist economic blocs was always going to be hard,” said Westpac Senior Agri Economist Nathan Penny. As a result, the benefits for New Zealand Inc. as a whole are small.
He also said that tariffs will be removed for small New Zealand exporters like those who sell kiwifruit, apples, wine, manuka honey, and seafood.
