New Zealand’s global dairy dominance will continue through greater economic engagement with Asia-Pacific states, rather than with competing markets in Europe and America, according to a new article issued by the Centre for International Governance Innovation (CIGI).
In CIGI Paper number 37, The Role of International Trade in the Rise of the New Zealand Dairy Industry from its Beginnings to the Fonterra Era, Bruce Muirhead traces the rise of New Zealand’s innovative dairy industry, including the highly successful mega-cooperative Fonterra, and examines how it will overcome future challenges and competition.
He says that New Zealand’s most important export sector would not be greatly affected should the Trans Pacific Partnership negotiation collapse.
The country’s dairy products trade has been diversified to include several Asian countries, including heavyweights China and India and the country will participate in negotiations designed to lead the Regional Comprehensive Economic Partnership, which includes China.
Such economic engagement means that New Zealand is not depending on trade with European and American markets.
He explains that if other countries have a viable industry of their own they are unwilling to consider competition with Fonterra because they cannot do so effectively without the use of government programs involving subsidies or tariff rate quotas, which block much of a national market through the use of very high tariffs once a certain threshold of imports has been reached.
Source: Agriview
