Sources have indicated NZ’s hard-ball tactics of demanding full elimination of tariffs on key agricultural products is also under review.
McClay confirmed the trade strategy “refresh” and said he instigated it to satisfy himself the existing strategy was the best one to tackle exporters' biggest market access headaches.
“When the strategy was put together 20 years ago the world was a different place.
“We have now free-trade agreements negotiated or in place with the majority of our significant trading partners.”
While trade agreements had “theoretically” made it easier for NZ companies to access new markets by lowering tariffs there were limitations – especially when it came to non-tariff barriers that often sprang up in the wake of trade deals as trading partners sought fresh means to buffer farmers from increases in imported competition, McClay said.
“Is there an opportunity to do more in other areas that will help NZ to do more with some of the trade agreements we have in place?
“No decisions on that yet but my sense from the industry, the agricultural sector, is that there are still some frustrations when it comes to access to various markets.”
High-profile examples of non-tariff barriers in markets where NZ already had trade agreements included ongoing problems faced by meat exports to China which continued to bar imports of chilled meat as well as holding back licences for export plants.
The industry also suffered in recent years from import regulations blocking beef exports to Indonesia.
NZ signed a free-trade agreement with the ASEAN countries, including Indonesia, in 2009.
McClay said he had asked for advice from the Ministry of Foreign Affairs and Trade (MFAT) on how resources could be redeployed to help tackle non-tariff trade barriers.
Turning their attentions to non-tariff barriers would be a change in the modus operandi of NZ’s trade bureaucrats who had till now largely focused on pursuing negotiations for tariff-busting free-trade agreements.
Two years ago a pan-industry group led by the Meat Industry Association approached MFAT to help fund a study into the cost of non-tariff barriers.
The study was touted by the group as a first step to convincing the Government to channel more resources into addressing the trade-restrictive measures but was still to get off the ground.
“My sense from the industry, the agricultural sector, is that there are still some frustrations when it comes to access to various markets.”
Todd McClay
Trade Minister
A similar report by the Australian meat industry put the cost to its producers at $1.25b a year.
Further evidence came from the Government’s recent analysis of the Trans Pacific Partnership that showed gains from tackling non-tariff barriers dwarfed savings from tariff reductions by a factor of more than two to one.
McClay said doing more to take on non-tariff barriers did not need to come at the expense of launching new trade negotiations.
“It is just a matter of deciding whether we have spare capacity to direct it to another area which is going to return dividends to NZ producers.”
McLay was reluctant to confirm if the review would also look at pulling back from demanding total tariff elimination on agriculture exports in future trade negotiations.
The tactic had arguably cost agricultural exporters in recent years as other countries, notably Australia, concluded trade deals ahead of NZ by accepting smaller tariff reductions.
The downside to the tactic was most evident in South Korea and Japan where Australian beef exporters gained market share at the expense of NZ rivals by virtue of starting tariff reductions earlier.
Farmers Weekly’s sources indicated the trade strategy review would consider NZ’s stance on tariff demands as a starting point.
Discussion on how equivalent market access gains could be incorporated into NZ’s negotiating stance would come later.
McClay said he expected the review to be completed by the end of the year.
