Friday, March 29, 2024

Frustration over EU trade talks

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Dairy leaders believe the European Union should reconsider its persistent stonewalling of improved access for New Zealand dairy products in free trade talks if it is serious about saving the planet.
Malcolm Bailey says the answer to improving farming efficiencies lies in a market-based solution like cap and trade – already used to manage nitrate emissions around Lake Taupō.
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The EU’s top trade official last week launched a new trade negotiations strategy for the bloc, promising a tougher approach with trading partners on workers’ rights and the environment.

From now, commitment to reduce emissions in line with the Paris Climate Accord would be an “essential element” of any trade agreement with the EU.

Priority will be given to reducing tariffs on environmental products and services and encouragement given to countries to slash subsidies encouraging the consumption of fossil fuels, the EU’s new trade commissioner Valdis Dombrovskis said.

Becoming commissioner last October, Dombrovskis said he would seek to renegotiate the EU’s 2019 trade agreement with the Mercosur trading bloc to deal with criticism of the environmental record of the South American countries involved.

All of this comes as NZ enters its fourth year of negotiations for a trade agreement with the EU without an acceptable offer on market access for dairy and meat into the European market.

But Dairy Companies Association of NZ (DCANZ) executive director Kimberly Crewther says the EU should reconsider its offer after a recent study commissioned by the NZ dairy industry proved its farmers have the lowest carbon footprint of any milk producers in the world.

“NZ’s products are highly efficient and yet they face high tariffs for entry into the EU,” Crewther said.

“So if it is a consideration of the efficiency of the products, then it is equally legitimate to be removing those tariffs.”

DCANZ chair Malcolm Bailey says EU leaders had talked a lot about doing more to tackle both climate change and trade protectionism, but had done little on either.

“Everybody is saying we need to be more efficient. So this (buying more NZ dairy products) is a way to limit the release of climate gases and meet these targets that everyone has signed up for,” Bailey said.

“You have actually got to live it and not just talk about it.”

Bailey says the most recently reported EU offer prior to the eighth negotiating round in June last year was to open up a miniscule 0.02% and 0.03% of its domestic cheese and butter markets to more carbon-efficient NZ dairy products.

At the same time, dairy exports to the rest of the world from the relatively more carbon-intensive EU dairy industry were increasing.

But the arguments of the NZ dairy industry seem to be having limited impact on the talks so far.

A high-level source says both sides remained far apart on market access for NZ agricultural exports into the EU.

The source says Trade Minister Damien O’Connor spoke to EU Commissioner Dombrovskis in December following the NZ election.

“There was a big gap between them but the Commissioner did acknowledge that the EU would have to look in its pockets again, but we got no timeframe for when they would be looking in their pockets,” they said.

“We have been working on it for nearly four years now. It is nearly all there, but the big gap is market access.” 

The tenth round of negotiations is due in the first quarter of 2021.

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