ASEAN free-trade agreement lauded by M&WNZ

by Bryan Salvage
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WELLINGTON, N.Z. — The improved trading environment for meat and wool products that will result from the free-trade agreement signed recently at the ASEAN summit in Thailand was welcomed by Mike Petersen, chairman of Meat & Wool New Zealand.

"The ASEAN-Australia-New Zealand f.t.a. is a big opportunity, not so much for what it delivers today, but for what it will deliver in the future," he added. "With global recession as the dominant theme today, this agreement is a positive step to ensuring that economies in this region can focus on economic growth in a better trading environment. Importantly for New Zealand sheep and beef farmers, the f.t.a. means that we will not be at a competitive disadvantage compared with other major exporting countries, and in the longer term it offers tariff-free access for New Zealand meat and wool products."

The ASEAN countries are a market of high growth potential and are a significant future opportunity for New Zealand's agricultural products, including those from the sheep and beef sector, he added. "This agreement is particularly good news on the back of announcements by the Minister of Trade, Mr. Tim Groser, that we are entering into negotiations with India, which also offers great opportunities for our sector," he said.

ASEAN is rapidly growing in its importance for New Zealand meat products, with exports to the region totaling more than US$166.2 million in the year to September 2008. ASEAN is the third most-valuable market for New Zealand beef, with US$48.4 million of that trade going to Indonesia. The region is also an important market for co-products, including offal, skins and hides and animal feed.

The negotiations were difficult because the agricultural producer organizations in several ASEAN member states lobbied their governments to resist making concessions on farm products, Mr. Petersen said. "Meat & Wool New Zealand played an important role throughout the negotiations in providing information and promoting the interests of New Zealand sheep and beef farmers," he added. "We were particularly keen to obtain improved and secure access for meat in Indonesia, Vietnam and the Philippines, the larger members of ASEAN with which New Zealand does not have an existing f.t.a. or an f.t.a. under negotiation."

Although the current applied tariffs are low, it is important to get these locked down and eliminated, and that’s what the FTA will do for New Zealand over the longer term, he said. "For example, tariffs on beef into Indonesia are 5%, but it has the ability to raise them up to 50%," he added. "This agreement will eliminate the risk of tariff increases on imports from New Zealand and secure duty-free access for most beef, sheep meat and co-products by 2020."

Implementing the f.t.a., however, will depend on when it is ratified by New Zealand, Australia and individual ASEAN member states. The goal is for the agreement to enter into force by July 1.

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