“The facts are that dairy accounts for 35% of NZ exports. You can’t even come close to achieving an acceptable deal for New Zealand without a good deal on dairy” says DCANZ chairman Malcolm Bailey.
DCANZ which represents the common policy interests of 11 New Zealand dairy companies, accounting for 98% of milk processed is following the negotiations carefully. “There is no evidence that other countries in the negotiation have backed away from their major export interests, so there is no way New Zealand should back away from ours,” says Bailey. “We understand Japan continues to push for complete tariff elimination for automobile trade, which accounts for a similar percentage of Japanese trade, as dairy does for New Zealand. The removal of barriers for autos is important for them, and achieving liberalisation on dairy is important to us”
The importance of a good deal for dairy in TPP was conveyed by the full DCANZ Executive Committee to the government at a meeting in Wellington last week. “We have been very clear about the need for good outcomes for dairy if we are to support the TPP deal” says Bailey.
Achieving trade liberalisation for dairy products is a key way the government can help ease the severe volatility of global dairy prices for farmers. “Right now the entire New Zealand economy is feeling the effects of the thin global market for trade in dairy products. Trade liberalisation will provide a platform for greater market liquidity by opening up access into markets that have been closed to us.
” DCANZ also emphasises that the systems of protection that some TPP members are trying to protect are failing. Japan has had to resort to ’emergency’ dairy import tenders for a second year in a row, and Canada is dumping milk because its policies to manage supply do not work. “In both cases it would be better to allow producers to respond to market signals, new imports under TPP can play a constructive role in the development of both dairy sectors” says Bailey.