Beef + Lamb New Zealand has invested a lot of time and effort into building a strong relationship with producer groups in the United States, which means there is a strong appreciation of how our exports complement domestic production – particularly in the beef sector. As a result, we don’t see that we are likely to be a target for measures – such as threatened tariff rate increases – that the new administration might introduce to improve the competitiveness of US-produced goods. The danger for our sector on this front is that we are somehow caught in the cross-fire around any broader measures the administration might pursue. However, the immediate risk to our interests is President Trump’s executive order requiring a US withdrawal from TPPA, which as currently drafted can’t enter into force without US ratification. A TPPA including the US would have had a relatively minor positive impact on our trade with the US, due to existing low tariff rates faced by New Zealand beef and lamb in that market. The real significance of TPP to our sector was, and still is, that it would make our sector significantly more competitive in other TPP countries, with Japan being a good example. At the moment, courtesy of its bilateral FTA, Australian beef enjoys a tariff rate on exports to Japan that is 10 percentage points lower than competitors such as New Zealand and the US. As a direct result, in the past two years Australian beef exports to Japan have increased by 13%, while those from New Zealand and the US have fallen by 10 and 11% respectively. President Trump’s decision to withdraw the US from TPP means that this opportunity to level the playing field into key Asia Pacific markets, such as Japan, has been lost for the short term. What remains to be seen is whether a remodelled TPP can or will develop, as it will be in the interests of the TPP parties to find a way to resurrect a multilateral deal rather than face the risk and uncertainty associated with reverting to bilateral deals, particularly if the US is going to play hardball under the Trump administration. www.foodtechnology.co.nz 17 New Zealand - despite us being a minnow - and softens slightly on his trade views. For example, there have already been suggestions that the quick exit from TPP may be followed up with more direct trade agreements. No doubt advisors will be pointing out that with 124 countries having China as their main trading partner (compared to 56 countries having the United States as their main trading partner), trade relationships in the long term are stronger than purely diplomatic ones. It’s important that we continue to focus on two-way trade with all our trading partners. The US withdrawal from the TPPA is an immediate risk to New Zealand’s interests, Beef + Lamb New Zealand chairman James Parsons warns
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