An Australian farming group is calling for negotiators to push for a better deal than New Zealand received. Photo / Bevan Conley
An Australian farming group is calling for negotiators to push for a better deal than New Zealand received. Photo / Bevan Conley
Australia’s farmers have rubbished the new NZ-European Union free trade deal and urged compatriots to run a mile if the EU offers them something similar.
The Kiwi deal with the European bloc of 450 million people was formalised on Monday morning and expected to save Kiwi exporters at least $110million a year by 2029.
The local dairy industry hated the deal but many in the technology, horticulture and viticulture sectors supported it.
In Australia, the head of a powerful farmers’ group said his country needed meaningful access for lamb, beef, dairy and sugar consumers in Europe.
He took a dim view of the agreement New Zealand signed, urging Australian negotiators to push harder.
Former Primary Industries Minister Nathan Guy, now Meat Industry Association chair, said the effort Kiwi delegates put into the FTA should not be underestimated.
“We’ve got some of the best negotiators in the world.”
Nathan Guy says the Europe FTA has sparked a range of reactions from disappointment to euphoria, depending on which primary industry you're talking about. Photo / NZME
He told the Business Herald the FTA’s impact varied dramatically from sector to sector.
“It’s fair to say the meat industry and dairy are disappointed, but in saying that we do realise there is an upside in the sheepmeat quota.”
Guy said the honey industry was happy and mānuka producers were “over the moon”.
Professor Christoph Schumacher said in free trade negotiations, the larger nation or bloc generally came out on top.
“Europe has always been sort of a fortress through the EU and has imposed tariffs,” he told the Business Herald.
He said the EU subsidised its own farmers and imposed tariffs on outsiders to the point Australian or New Zealand produce was often as costly in Europe as that from local farmers.
Schumacher, Massey University Professor in Innovation and Economics, said Australia had more heft in its EU negotiations than New Zealand had.
But Australia was still a minnow compared to the EU, which had an estimated nominal GDP exceeding US$17 trillion (NZ$27t) or more than 10 times Australia’s.
He said it was for the World Trade Organisation (WTO) to ensure abuses of trade agreements were not indulged and the fairest possible agreement was reached.
Beef exporters say the Kiwi-EU deal falls well short of expectations. Photo / Babiche Martens
Geopolitical tensions, including US-China rivalry and Russia’s invasion of Ukraine, have led some commentators to argue globalisation was in retreat.
“It feels a bit like we are stepping back from the big globalisation movement,” Schumacher said.
He said the world probably reached “peak” globalisation already but EU talks with Australia showed globalisation had not stalled.
And he said the WTO was still relevant, despite critics frequently calling it toothless.
He said once the NZ-EU agreement took effect, trade agreements would cover 75 per cent of New Zealand’s trade.
The Government on Monday said New Zealand would gain up to $1.8 billion in exports to the EU with the new deal.
It said $46 million in horticultural export tariffs would be slashed immediately.
And it said independent professionals would benefit from more streamlined and transparent visa processes.
Services and industry contribute far more to New Zealand’s GDP than agriculture but it’s a different story with exports to Europe.
The Ministry of Foreign Affairs and Trade said major NZ exports to Europe were meat, fruit, wine, fish and seafood, dairy, medical appliances, and machinery.
The EU-NZ deal would allow 10,000 tonnes of New Zealand beef into the bloc. That’s a minuscule fraction of the 6.5 million tonnes Europeans consume.
Federated Farmers president Andrew Hoggard last year called the deal “a slap in the face” for Kiwi farmers.
Services exports to the EU are currently a fraction of goods exports but that is expected to change in future. Photo / MFAT
The Dairy Companies Association at the same time said the deal left 98.5 per cent of the EU market sealed off.
But kiwifruit and onion exporters were happier with the deal, as was the local wine industry.
Mfat said services exports including tourism, transportation, and professional and consultancy services were also important to the trade relationship.
Major imports included machinery, aircrafts, cars and pharmaceuticals.
The Government said Kiwi consumers would benefit from cheaper European footwear, apparel, cosmetics, furniture, chocolate, kitchen appliances, machinery, motor homes, forklifts and some agricultural goods.
In New Zealand, tariffs up to 10 per cent are still sometimes imposed on imports.
Schumacher said broadly speaking, if you made something already made in NZ, and weren’t in a country signed up to a free trade deal, you could expect tariffs.
A 56-page Customs tariff index provides an outline of imports likely to face tariffs - with extremely specific listings such as “Basketball shoes, with outer soles of rubber, plastics, leather or composition leather and uppers of textile material.”
John Weekes is online business editor. He has covered politics, crime, courts and consumer affairs. He rejoined the Herald in 2020, previously working at Stuff and News Regional, Australia.
