It meant there were huge odds stacked against New Zealand gaining better trade access from the negotiations, Luxton said in his address at DairyNZ’s annual meeting in Morrinsville.
«When the United States talks about being open to free trade, their dairy industry is basically scared of New Zealand even though we’re 20 per cent of their size, so there’s no way they were going to allow open access of New Zealand into their market.»
The US was fearful despite it being highly unlikely New Zealand’s dairy export trade would pull out of China and enter the US market.
«They don’t seem to realise we won’t flood their market if the doors were open.»
New Zealand produced 3 per cent of the world’s milk, of which 8 per cent was traded internationally.
A 2-3 per cent increase in the US and Europe’s production meant another 10 per cent of product on the world market.
«If only we could have got the US to really believe in free trade, we would have possibly have 20 per cent of the world market open and fluctuations would [be] far less.»
New Zealand’s 11,927 dairy herds were similar to numbers in Japan and Canada, but production in those two countries was less than half of New Zealand’s. The US in comparison had 50,000 farmers.
Their respective lobbyists prevented their consumers accessing a cheaper product.
«That’s partly because they are subsidised and protected by quotas and access arrangements and by tariffs.»
That made it difficult for any new rules getting through what was an increasingly dysfunctional US Congress and Senate.
Minister of Primary Industries Nathan Guy said the TPPA result was «slightly disappointing» for the dairy industry despite being up against highly protected industries in the US, Canada and Japan.
«Tim Groser and his colleagues pushed as hard as they could.»
The result was a significant and small step that would hopefully lead to greater opportunities within the dairy industry, he said.
The negotiations were worth about $2.7 billion by 2030 and $260 million in tariff eliminations.
They opened opportunities in the Japanese beef market with tariffs dropping from 39 to 9 per cent.
Guy called it a positive deal for New Zealand as a whole and opened access to 800 million consumers.
He rejected calls by critics that New Zealand should step away from the deal.
«We need to be there, we need to be working alongside those 11 other countries,» he said.
Next year looked more positive for the industry.
The widespread culling of dairy cows along with the El Nino weather pattern that was expected to hit New Zealand this summer meant a fall in dairy production was likely.
«Fonterra is expecting a production reduction of around 5 per cent, so suddenly if that occurs here and in other parts of the world, the supply imbalance suddenly corrects itself and that’s what we’re starting to see play out,» Guy said.
In other business, three positions on the DairyNZ board of directors were also announced, with Ben Allomes (Woodville), Michael Spaans (Te Aroha) and Elaine Cook (Hamilton) being voted in.
A new chairman would be elected in November when the board met for the first time. In the meantime, the board would appoint an interim chairperson.
A second election for the directors’ remuneration committee saw David Gasquoine (Matamata) Chris Lewis (Pukeatua) and Gerard Wolvers (Te Awamutu) voted in.
Source: Stuff
