NZ had good access into the US already for beef and sheep meat so the US was New Zealand’s largest meat market by a large margin.
“We can expect that access to continue as these are long-standing agreements under the World Trade Organisation,” Pasons said despite Trumps anti-imports speeches and threats to tear up trade deals while quitting the WTO.
“However, this election isn’t a positive development for further trade liberalisation such as TPP.
“A key impact on beef producers from a delay in TPP passage will be a loss in market share in NZ's beef exports to Japan.
“This is because Australia’s FTA with Japan, which entered into force last year, gives them an increasing tariff advantage over NZ beef exports.”
The irony of the American election was that with Republican majorities in the Senate and House of Representatives as well as holding the presidency exporters would normally have thought the stars had aligned for progress on trade liberalisation with the US in the next four years.
“But Trump took a strong stance against TPP and trade liberalisation during his election campaign.
“We’ll be interested in what key senators, congressmen and Trump say on trade in the next few days and weeks and in particular about TPP,” Parsons said.
Approval of TPP by Obama in the lame duck period between now and Trump’s inauguration in mid-January seemed highly unlikely so if the USA didn’t ratify TPP then the deal stalled.
But time would tell whether Trump's views on trade could be changed and all eyes would be on his key administration appointments.
“Obama campaigned against trade before his first presidential term.
“He stalled passage of three US FTAs with Korea, Panama and Colombia but after a couple of years allowed their passage and is now very focused on ratifying TPP,” Parsons said.
“Trade liberalisation is a long game and we are fortunate to have good relationships with US producer organisations.
“The TriLamb Group and the International Beef Alliance are key forums for this and are both in good heart,” Parsons said in his latest Chairman’s Update.
Parson also expressed an optimistic view of trade with Britain saying NZ had every right to expect that agreements would be honoured in the same way NZ honours its agreements.
When he recently returned from a post-Brexit visit to Britain Parsons said detected no appetite among British farm leaders to limit access for kiwi sheep meat.
Fears of a protectionist backlash from trading partners would stop British sheep farmers demanding imported competition from NZ be chopped back in the wake of Brexit
“We thought some of the farming leaders up here might have seen it as an opportunity to game things, look at renegotiating quota access.
“They are very aware that if they take a very protectionist stance and want to put up borders then that could come back to bite them on the backside,” Parsons said on his return.
But the following week National Farmers Union livestock chairman Charles Sercombe disputed the claim his group would not challenge NZ’s privileged access to the European and British markets.
“I have no problem with NZ product at certain times of the year but will push for seasonality in any future arrangements, a fact James is more than aware of as it causes the most angst among UK sheep farmers,” Sercombe said.
But Parsons has now taken a swipe back.
“So where is this going to end up?” he asked.
“My personal view is despite posturing by some, NZ’s sheep meat quota into the EU and UK is solid under WTO rules.
“Secondly, Europe is not self-sufficient in lamb and if Britain wishes to become a true trading nation, it will not want to renege on long standing trade deals with traditional allies like NZ
“Remember that along with making significant sacrifices in supporting our historical homeland during two world wars we’ve helped build the lamb trade in UK over the last 134 years.
“This is not an excuse to be complacent but we have every right to expect that agreements will be honoured in the same way we honour ours.”
However, increasing consumers’ demand for lamb was a separate issue, which B+LNZ had given a lot of thought to.
“This also was a key topic of discussion with UK and EU farming groups.
“B+LNZ’s new market development strategy fits really well with the need to develop new markets and greater consumption for lamb.”
But Parsons then held out an olive branch to his northern hemisphere counterparts.
“Among the many options, our sincere wish is to explore opportunities with northern hemisphere producers to supply third countries in a co-ordinated fashion counter seasonally.
“This will take a lot of work jointly with NZ exporters and also processors offshore but presents significant opportunity if executed well.
“In a back-handed way, Brexit has been so disruptive it has become a catalyst for a level of fresh thinking I’ve never seen before in the UK and Europe amongst government, farmers and processors.
“Our market intelligence programme will be the right avenue to scope these opportunities.”
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World markets analysis by the B+LNZ trade policy team
