The Country on the EU trade deal: Dairy, red meat sectors unhappy with result

Prime Minister Jacinda Ardern and European Commission President Ursula von der Leyen signed a policing agreement ahead of announcing a trade agreement. Photo / Thomas Coughlan

New Zealand and the European Union have agreed on a free trade deal after four years of negotiations. In the wake of the decision, The Country's Rowena Duncum discussed the deal with Minister for Trade and Agriculture Damien O'Connor, Beef + Lamb chief executive Sam McIvor, DCANZ chair Malcolm Bailey, Zespri's chief grower, industry and sustainability officer Carol Ward and former NZ special trade envoy Mike Petersen.

Minister for Trade and Agriculture Damien O'Connor remains optimistic about the Government's Free Trade Agreement with the EU, despite disappointment from New Zealand's dairy and beef sectors.

"This is a deal that's not perfect but it's actually the best deal we could deliver and it's a very good one for New Zealand," he told The Country's Rowena Duncum.

Under the new deal, New Zealand will be able to export 10,000 tonnes of beef to the European Union at a tariff of 7.5 per cent a year.

The red meat sector was unhappy with this result.

"It's fair to say we're fairly gutted," Beef + Lamb chief executive Sam McIvor told Duncum.

"We've got 10,000 tons of access into a market that consumes 6.5 million tons a year."

McIvor said the sheep and beef sector was New Zealand's second-largest exporter and employed 5 per cent of the population.

Listen to Rowena Duncum's full interview with Damien O'Connor on The Country below:

"If you talk about a commercially significant trade deal – it had to have something more."

While New Zealand negotiators were successful in conveying how sustainable Kiwi sheep and beef products were, it fell on deaf ears, McIvor said.

"Our values and the way that we farm resonate with the European community but the reality is, at the end of the day, they want to lock their market out to any product and frankly, it's their consumers that miss out.

He questioned the value of a trade agreement where New Zealand dairy and sheep and beef industries were left unhappy.

"You have to ask yourself the question; is it a really good deal for New Zealand when your two biggest industries get pretty inadequate access into what is a very big and lucrative market."

Listen to Rowena Duncum's full interview with Sam McIvor on The Country below:

Minister O'Connor told Duncum there were "real opportunities" for both sectors, especially dairy.

"We've opened up 36,000 tons of butter from a [previous] quota arrangement that actually delivered nothing effectively."

Dairy Companies Association of New Zealand (DCANZ) chair Malcolm Bailey disagreed, saying the sector was "very disappointed with the outcome".

Listen to Rowena Duncum's full interview with Malcolm Bailey on The Country below:

"The volumes of new access into the market are very small and they come with some difficulty around crossing tariff barriers that will remain," he told Duncum.

Bailey remained unconvinced that there would be any "commercially meaningful access" into the EU market and was concerned the Government had calculated benefits that were "incorrect".

Meanwhile, the kiwifruit sector has welcomed the free trade agreement, noting businesses, consumers and communities in both countries will benefit.

"It was great news to wake up to this morning," Zespri's chief grower, industry and sustainability officer Carol Ward said.

On day one of the agreement, kiwifruit, along with wine, onions, apples, mānuka honey and manufactured goods will receive tariff-free access to the European single market.

Listen to Rowena Duncum's full interview with Carol Ward on The Country below:

"This is really meaningful for us, we've been paying 8.8 per cent tariffs since the 1970s and every year this is millions and millions of dollars in tariffs which go to the EU government," Ward told Duncum.

Ward calculated the immediate benefit to the kiwifruit sector would be around NZ$45m worth of tariffs that would no longer have to be paid.

The news was especially welcome considering the sector was facing a tough future, Ward said.

"It won't reduce the increases in costs to extent that we need but certainly every little bit helps."

One man who has been involved in a few trade negotiations is former special agricultural trade envoy, Mike Petersen.

He said that while the deal was "far from perfect" he still believed it was a "very good deal" between New Zealand and the EU, particularly for seafood, horticulture and the services sector.

He could understand the frustration from the beef and dairy sectors but said they were "always going to be the toughest part of the negotiation".

Listen to Rowena Duncum's full interview with Mike Petersen on The Country below:

"The Prime Minister and Minister O'Connor had to make a call about whether to accept something that was substandard but provided opportunities for the wider context of our trading relationship with Europe or to walk away," he told Duncum.

"Clearly they haven't just walked away and I support the fact that we should just sign the deal and get on with business."

There were other markets that dairy and beef could turn to and Petersen remained hopeful that the EU deal was "just the start".

"If we build relationships in Europe and become trusted as a supplier of high quality, safe food with good animal welfare and health practices that there will be revisions in future years to come."