Trade
The vast majority of New Zealand's farm production is exported, for example 93 percent of lamb, 82 percent of beef and 95 percent of dairy production. Over half of New Zealand's total merchandise exports come from the pastoral sector. With growing pressures on global food supply and food prices it is likely that demand for New Zealand food products will increase, especially in non-traditional markets which are becoming wealthier.
Trade Liberalisation
Farmers have always strongly supported efforts to promote the benefits of free trade and particularly efforts to negotiate improved market access and reduced trade barriers for our exports. Federated Farmers strongly encourages efforts to reduce tariff and non-tariff barriers
and the elimination of agricultural subsidies and other policies that distort markets.
Over the past 20 years progress has been made to reduce these barriers but we are still a long way from achieving free trade. In 2010 nearly $1.5 billion in tariffs was paid by our exporters on $18.5 billion worth of agricultural exports. This is effectively an 8 percent reduction in farm revenue and an even bigger impact on farm profitability.
The biggest gains from trade liberalisation would arise from a multilateral agreement through the World Trade Organisation (WTO). Federated Farmers has strongly supported successive governments' efforts to achieve liberalisation of agricultural trade but progress has been painfully slow.
With the WTO stalled, the next best option is the negotiation of free trade agreements with important trading partners. Encouraging progress has been made in recent years, with the plurilateral Trans-Pacific Strategic Economic Partnership, and free trade agreements with China, ASEAN, Malaysia, and Hong Kong. We also welcome the current work to secure agreements with countries such as the Gulf States, India, Korea and Russia-Belarus- Kazakhstan, as well as expansion of the Trans-Pacific Strategic Economic Partnership. Federated Farmers wants these agreements to be comprehensive and result in meaningful liberalisation of agricultural trade.
Tariffs
65 percent of imports enter New Zealand tariff-free and no product has a tariff rate of more
than 10 percent. Tariffs neither raise much money for government nor offer significant protection for industries. New Zealand’s remaining tariffs should be phased out to lower atborder costs and promote New Zealand’s international connectedness. Unilateral elimination of tariffs would also show the world that New Zealand remains committed to free trade.
Protection busters
Federated Farmers has joined the Business Roundtable and the Chamber of Commerce in supporting a call on G20 leaders to focus on combating domestic pressures for protectionist policies. The recent global financial crisis and recession has given rise to new protectionist measures and the costs of these measures must be brought home to consumers and the wider community. Fighting protectionism is hugely important for increasing returns to subsidy-free New Zealand farmers.
Please download the PDF documents below to view the joint media statement and communiqué.
Who speaks for farmers on trade?
National Board spokesman for trade is National President Bruce Wills. He can be contacted at bwills@fedfarm.org.nz.
