TPP will give food producers greater access to markets

1 February 2016

The Trans-Pacific Partnership trade pact will provide greater access for New Zealand-produced food in the 11 countries we will be signing up with, says FGC Chief Executive Katherine Rich.

“It will mean our food producers will have a fairer chance of competing in international markets. The TPPA covers a huge marketplace of consumers where New Zealand is growing its exports.”

The TPPA will be signed in Auckland on Thursday, after which it will go through the ratification process of Select Committee hearings, public submissions, and debate and vote in Parliament.

“Our economy flourishes or falters based on trade, and a huge amount of that trade is in food. The food industry employs 1 in 5 Kiwis, and food exports earn a massive 50% of all our export earnings. Some 90%o of the dairy and meat produced in New Zealand is exported.

“Our country is a market smaller than Sydney so we have to trade with the world. This is why access to markets matters so much. If the world shut its doors to New Zealand products and solely followed a ‘buy local’ policy then our standard of living would go backwards fast.

“The TPPA will provide greater access so New Zealand food producers can have a fairer chance of competing in international markets. It covers a huge marketplace of consumers where New Zealand is growing its exports.

“It will be our biggest ever free trade agreement – bigger even than the FTA with China.

“It will eliminate tariffs on exports to TPP countries, apart from beef exports to Japan (though these will reduce significantly) and some dairy exports. Although we didn’t get the dairying benefits the Government fought hard for, there are many benefits all around. Dairying will still be better off, and there will be huge gains for kiwifruit, beef, seafood, wine, and manufactured goods. Under TPP, the kiwifruit sector is expected to become our fifth biggest export earner.

“On current export volumes, tariff savings are expected to amount to $259 million a year, exports will be boosted by 10% by 2030, and overall our economy is expected to get a boost of $2.7 billion a year when TPP is fully implemented – a boost of around 3%.”

FairfaxMedia asked FGC if food prices were likely to be lower once 5% tariffs on imported processed food were removed when the TPP came fully into force.

Katherine Rich said that in terms of grocery prices in supermarkets, she doubted there would be any change at all because tariffs on imported food and beverages were removed years ago.

“The issue isn’t really local food prices, it’s international food markets and the huge benefits New Zealand will gain from being a member of the TPP.”