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Home / Bay of Plenty Times

Tax drop great for Zespri

By Carmen Hall
NZME. regionals·
8 Oct, 2015 04:00 AM4 mins to read

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Trade Minister Tim Groser.

Trade Minister Tim Groser.

Bay farmers, horticulturists and rural leaders welcomed the Trans-Pacific Partnership saying it will save millions in costs and enable New Zealand to be more competitive in the global marketplace. But most agreed there was still a lot of work to be done.

Trade Minister Tim Groser said the comprehensive agreement offered better access for New Zealand goods and services in 11 important markets across Asia and the Pacific.

"Overall, TPP is a very positive agreement for New Zealand, further improving access to international markets, which supports our exporters to grow and create new jobs."

Beef + Lamb New Zealand chief executive Dr Scott Champion said that in 2014 the sheep and beef sector's exports to TPP countries were charged a total of $94.3 million - with the majority of that cost ($77.4 million) incurred on exports to Japan. Significant tariff costs were also charged on exports to the US ($13 million) and Mexico ($2.9 million).

"This deal will help improve the competitiveness of our exports by removing tens of millions of dollars of tariff costs."

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The Japanese market had been a major TPP focus, especially as the competitive position of our beef exports there was negatively affected by the recent Australia-Japan FTA, he said.

Federated Farmers president Dr William Rolleston said the deal appeared to be beneficial for agriculture and New Zealand.

He said while these trade deals were never perfect " ... and while we still await much of the detail, it's clear we are better off today than we were yesterday".

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Bay of Plenty Rural Support Trust chairman Derek Spratt said it was a good policy although the dairy sector did not get what it was after - but that was not unexpected.

However, he said it was early days and there were still many hurdles to cross before it was implemented.

"It is only documented at the moment and the first big hurdle is to get it through America because it could have the opposition over there boycott it. But it will have good benefits for New Zealand overall, eventually."

Fonterra chairman John Wilson said the TPP was a small but significant step forward for the dairy sector. "While I am very disappointed that the deal falls far short of TPP's original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the US, Canada and Japan. Greater benefits will be seen in future years as tariffs on some product lines are eliminated."

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The Dairy Companies Association of New Zealand chairman Malcolm Bailey said it too was disappointed the agreement had not delivered a more significant opening of TPP dairy markets.

Federated Farmers Rotorua, Taupo, provincial president Alan Wills said "there was a little bit in it for everybody and it's a good start".

Zespri chief executive Lain Jager said the industry paid more than $15 million in tariffs into Japan (its largest market) last year.

"If this tariff relief was passed straight through to New Zealand growers, it would equate to savings of over $1000 for every hectare of kiwifruit grown in New Zealand. This tariff elimination will also benefit Japanese consumers by supporting our competitiveness against other fruit in Japan."

New Zealand Kiwifruit Growers Inc president Neil Treblico said getting New Zealand to this advantageous point had been many years in the making and there would be significant savings for growers.

As a result of TPP:

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* Tariffs on beef exports to TPP countries will be eliminated, with the exception of Japan where tariffs reduce from 38.5 per cent to 9 per cent.
* New Zealand dairy exporters will have preferential access to new quotas into the United States, Japan, Canada and Mexico, in addition to tariff elimination on a number of products.
* Tariffs on all other New Zealand exports to TPP countries - including fruit and vegetables, sheepmeat, forestry products, seafood, wine and industrial products - will be eliminated.
* TPP, like any free trade agreement, will go through New Zealand's Parliamentary processes and is expected to come into force within two years.

- Source, Trade Minister Tim Groser

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