Moore best man to champion NZ meat

Mike Moore's high profile in NZ-US partnerships over the past few years will stand him in good stead in the US. Photo / Paul Estcourt

The appointment of Mike Moore as New Zealand's ambassador to the United States is a positive move for our sheep and beef farming sector.

The former head of the World Trade Organisation has been told by Foreign Affairs Minister Murray McCully that a free trade deal with the US is a priority once he settles in Washington and given he has been hand-picked for the role because of his considerable experience in the area of trade liberalisation, this is good news.

On the books is the opportunity to have the US join the Trans Pacific Partnership (TPP), which would be a significant step towards trade liberalisation within the Asia Pacific region. The Trans-Pacific Strategic Economic Partnership Agreement (TPP, previously known as P4) between Brunei Darussalam, Chile, New Zealand and Singapore, was signed in 2005.

The first round of negotiations to expand the TPP to include the United States, Australia, Peru and Vietnam was scheduled to take place last March. However, following the Obama inauguration last January, the US postponed the first set of talks to allow time for a review of all US trade agreements and policy priorities.

News came at the end of last year that the US was ready and committed to proceed negotiations with President Obama using the Apec meeting in Singapore to officially push go.

The complexity of completing the TPP negotiations becomes quickly apparent when the interests of eight participants require consideration.

Others have tried to characterise TPP as primarily a bilateral agreement for New Zealand with the US, but it is much more than that.

The TPP has the potential to deliver new trade flows in the powerhouse Asia-Pacific region. Previous options to achieve this have been promoted, but TPP has the potential to deliver the big prize through its "ground-up" approach of like-minded countries working together.

Of course this deal is also part of the process of bringing us a step closer to improved access for our sheep meat and beef products in the biggest economy in the world - the US.

By global trade standards New Zealand beef and lamb already enjoys good access to the US, but there are still likely to be significant benefits for our sheep and beef farmers when this agreement is secured, and more when other countries conclude negotiations to join the Trans-Pacific Agreement.

Last year the US took 177,000 tonnes of our beef. This is 48 per cent of New Zealand's total beef export volume, making the US by far our largest beef market.

These exports entered the US under New Zealand's Country Specific Tariff Quota, (TRQ) and attracted tariffs of US4.4c/kg totalling $10.3 million. Out-of-quota tariffs are even higher at 26.4 per cent.

Most of our beef exports to the US are used in ground beef products like hamburger patties and hot dogs. This is ideal for New Zealand bull beef and manufacturing cow beef out of the dairy industry, especially when combined with US fat trim to produce the ideal specification product for the US market. In this way New Zealand beef is complementary and adds significant value to the US product.

This end-use has turned out to be the silver lining in the clouds of the US economic downturn. Consumers have traded down from high-priced beef cuts and eating in high-end restaurants and moved to ground beef at retail and in fast-food restaurants across the nation.

Opportunity clearly exists for New Zealand lamb in the US market. Through the efforts of the Tri-Nations Lamb Group, alongside Australian and US producers, Meat and Wool New Zealand and New Zealand exporters have been working to get more Americans eating lamb. At 453g per capita, US lamb consumption is low compared to beef at 28kg per capita.

The major focus of the Tri-Nations Lamb Group has been to raise awareness among Americans of the health benefits of eating lamb. Now entering its third year, the project's main objective is motivating nutrition influencers, like dietitians and food professionals to recommend lamb as a nutritious, lean and delicious protein.

During the recession the US sheepmeat market has held up reasonably well in spite of large volumes of cheap competing pork and poultry. New Zealand has traditionally been strong in food service supply with an emphasis on frozen frenched lamb racks, but as the recession has hit the upscale and casual dining restaurant sector, market conditions have become more challenging for New Zealand lamb suppliers.

The US is New Zealand's second most valuable market for lamb behind the European Union. New Zealand exports around 19,000 tonnes of sheep meat to the US worth more than $200 million annually. Tariffs on sheep meat range from US0.7-2.8c/kg. US consumers, like those in other well developed markets are increasingly interested in food safety, and the nutritional benefits and dangers of different foods.

Our grass-fed red meat is high in protein, iron and other vitamins and it is particularly rich in omega 3 when compared to the predominantly grain- fed meat in the US. This is something we are positively capitalising on.

There are many opportunities for us in the US and across the broader Asia-Pacific region.

Forging improved trade access in these key markets is a goal Meat and Wool New Zealand and other farming and political leaders have worked towards over many years. Meat and Wool NZ will be providing background information and analysis that the Government trade negotiators will use as they deal with agriculture in the TPP negotiations ahead.

In the meantime, Moore's appointment should be welcomed as a positive step towards capturing more benefits for New Zealand sheep and beef farmers. His profile in Washington DC as co-chair of US-NZ Partnership Forums there in 2006 and 2009 and in New Zealand in 2008 already has him well plugged in to a powerful network of US policy makers.

Meat and Wool NZ and its predecessors have had a presence in the US for more than 40 years. We look forward to working constructively with Moore as we strive to achieve our shared goal of liberalising trade between New Zealand and the world's biggest economy.

Mike Petersen is chairman of Meat and Wool New Zealand.