Radio New Zealand - Te Reo Irirangi o Aotearoa

US dairy lobby stumbling block in talks - minister

Updated at 8:59 pm on 22 March 2010

Trade Minister Tim Groser says accusations of anti-competitive behaviour in the New Zealand dairy industry are rich coming from American politicians.

Thirty senators from the United States have expressed concern about the unfair impact a trans-Pacific deal would have on dairy farmers in America.

Talks aimed at reaching a deal among eight countries spanning the Pacific began in Melbourne last week. Those involved are New Zealand, the US, Australia, Chile, Brunei, Singapore, Vietnam and Peru.

The Trans Pacific Partnership could free up access to crucial export markets in the US, the world's largest economy.

The senators have written to US trade representative Ron Kirk criticising New Zealand's dairy industry for what they claim are anti-competitive practices.

They say Fonterra has excessive control over the global dairy market, and a trade deal could result in $US20 billion worth of losses in the first decade of any agreement.

'Facts do not support allegations'

But Mr Groser says the letter is just part of the hard negotiating involved in securing a trans-Pacific trade deal.

He says the senators represent areas with strong dairy interests and rejects their claims, saying New Zealand is an unsubsidised exporter, unlike the US.

"This is the most difficult issue - it always has been for us and the United States. The job in front of us is to get out the facts, frankly - because the facts do not support the allegations in that letter.

"We're an unsubsidised exporter. Fonterra takes world prices (and) doesn't set them and we just have to keep on making the case."

Mr Groser says the letter makes no difference to the way New Zealand will conduct its negotiations.

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