ASEAN Free Trade Agreement Welcome in NZ

“The ASEAN-Australia-New Zealand FTA is a big opportunity, not so much for what it delivers today, but for what it will deliver in the future. 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 FTA 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,” says Mr Petersen.

“The ASEAN countries are a market of high growth potential and hence are a significant future opportunity for New Zealand's agricultural products, including those from the sheep and beef sector. 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”

ASEAN is rapidly growing in its importance for New Zealand meat products, with exports to the region totalling over $330 million in the year to September 2008. ASEAN is the third most valuable market for New Zealand beef, with $96 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.

Mr Petersen says the negotiations were difficult because the agricultural producer organisations in several ASEAN member states lobbied their governments to resist making concessions on farm products.

“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.

“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 FTA or an FTA under negotiation,” says Mr Petersen.

“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.

“For example, tariffs on beef into Indonesia are 5 per cent, but it has the ability to raise them up to 50 per cent. This agreement will eliminate the risk of tariff increases on imports from New Zealand and secure duty-free access for most beef, sheepmeat and co-products by 2020.”

The implementation of the FTA will depend on when it is ratified by New Zealand, Australia and individual ASEAN member states. The aim is for the agreement to enter into force by 1 July 2009.

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