30 Jul 2015

Current TPP deal 'unthinkable' for dairy

2:23 pm on 30 July 2015

The dairy industry does not expect the Government to sign a Trans-Pacific Partnership trade agreement unless it includes a comprehensive deal for the sector.

Dairy farm at Apiti, Manawatu.

Dairy farm at Apiti, Manawatu. Photo: RNZ / Alexander Robertson

Ministers and officials from the 12 countries involved began meeting yesterday, with the aim of concluding conclude a deal by Saturday.

New Zealand Dairy Companies Association (DCANZ) chairman Malcolm Bailey, who is observing the TPP talks in Hawaii, says the next 48 hours will be crucial.

"We know at this stage that the offers that are being made are way below what needs to be offered to New Zealand for us to push on and seek a conclusion of these negotiations.

"Dairy is the number one export earner for New Zealand. It's unthinkable that New Zealand could sign up to a deal that doesn't look after our number one export earner."

Japan's position on the automotive industry was a parallel for that, he said.

"They won't do anything unless the auto sector, their number one sector, gets a good outcome, so it's just unthinkable that we could have a deal that doesn't offer significant benefits for dairy."

Mr Bailey said the industry accepted that it would not get what it had originally sought from the deal, but the outcome still had to be worthwhile.

dairy farm

Photo: 123rf

''If we go back to the beginning, tariff elimination over time was the goal. We have accepted the fact that we're not going to get all of that, that we are talking about some quota access into markets.

"We believe there has to be material, meaningful new commercial trade flows created and we're not being more specific than that, at this stage."

Mr Bailey said the United States was in the dominant position to decide the possible outcome for the dairy sector.

He said the US, not New Zealand, was the biggest dairy exporter in the TPP region and it needed to consider the benefits it would gain from breaking down dairy trade barriers.

"China's being talked about as a potential further member of TPP, so we just think that the US in particular is not reading this the right way, in terms of the potential growth of their dairy sector and growth of dairy exports, because if they don't do an ambitious deal on dairy trade here, now, they're really snookering themselves, going forward.

"We just think it's a strategic miscalculation."

Federated Farmers said New Zealand should walk away from the Trans-Pacific Partnership trade deal if there is nothing in it for the industry.

An anti-TPP protest in  Washington DC, earlier this year.

An anti-TPP protest in Washington DC, earlier this year. Photo: AFP

Its dairy spokesman, Andrew Hoggard, said he was disturbed by reports that other countries at negotiations in Hawaii were trying to shut out New Zealand milk from their markets.

"I struggle to see why we should be part of it if it's not going to encompass our biggest industries. The Japanese wouldn't bother being part of it if automotive wasn't in there."

Mr Hoggard said the current tariffs on dairy exports to Japan and the United States make exporting to those countries uneconomical for New Zealand farmers.

New Zealand's special agricultural trade envoy, Mike Petersen, who is also there, said concessions being offered so far to reduced dairy trade restrictions were not good enough, and there would need need to be progress on that over the next two days before New Zealand could accept the deal.