Trade Minister Todd McClay has fired the starter pistol on talks with Chile, Colombia, Mexico and Peru as New Zealand guns ahead to enshrine 90% of commodity exports in FTAs by 2030.
Two-way trade with the Pacific Alliance states generates NZ$1.1bn ($802m) annually and enhancing the flow of goods will “open the door” for companies to bolster business with the Latin American trade bloc, McClay said.
For New Zealand’s beef and sheep sectors, hit earlier this year by US President Donald Trump’s TPP withdrawal, efforts to improve international market access has been welcomed.
‘Positive development’
“In the recently-less-certain trade environment, this is a very positive development,” said Sam McIvor, CEO of levy board Beef + Lamb New Zealand.
“We appreciate the government’s continued leadership on trade liberalisation which is vital to our sector as approximately 90% of our sheepmeat and 83% percent of beef production is exported,” McIvor said.
New Zealand’s beef and sheep exports to Chile, Colombia, Mexico and Peru are modest. Combined turnover hit just NZ$22m ($16m) last year but Tim Ritchie, CEO of trade association Meat Industry Association (MIA), said the countries have “fast-growing economies” with potential for animal protein sales.
‘Big win’
“Our companies see good potential to grow our exports in the future under an FTA,” Ritchie said. “Mexico, for example has tariffs of 25% on beef and 10% on sheepmeat.
“We understand that the Pacific Alliance is interested in building a closer relationship with the Asia-Pacific and this positions New Zealand strategically very well to be a bridge in this wider process.”
Trade Minister McClay called the opening of FTA talks a “big win in the fight for the better access for New Zealanders to important overseas markets.” He added the trade block is a market of 221m consumers with governments committed to economic liberalism.
Matthew O’Meagher, president of the Latin America and New Zealand Business Council, also welcomed the opening of trade talks.
“This is superb news for New Zealand exporters. The four Pacific Alliance countries are close friends of New Zealand, strongly performing economies and staunch supporters of free trade. An FTA with them will diversify exporters’ options, open new markets for goods and services trade, encourage investment aimed at other markets, and boost wider trans-Pacific trade talks.