Next week, Damien O’Connor will head to London and Brussels to make headway on potentially lucrative trade talks with the UK and EU – but he may not receive an entirely warm welcome
New Zealand politicians and agriculture figures have downplayed British farmers’ fears about Kiwi exports flooding the market, as domestic politics threatens hopes of a swift conclusion to free trade talks.
In mid-June, Trade and Export Growth Minister Damien O’Connor will head to London and Brussels for discussions about New Zealand’s free trade negotiations with the United Kingdom and European Union.
O’Connor will be the first government minister to travel offshore since the Covid-19 pandemic began, enduring a two-week stay in managed isolation upon his return.
But some peace and quiet could be exactly what he needs after his trip, depending on the reception he receives from British farmers.
While O’Connor and his British counterpart Liz Truss recently announced plans to accelerate negotiations, there has been some unrest within the UK over a reported zero-tariff offer for both countries.
There have been reports British farmers may protest at the G7 summit scheduled to take place in Cornwall next month, while in an opinion piece for the Mail on Sunday, National Farmers Union president Minette Batters claimed the removal of tariffs “would make life unbearable for small British family farms”.
“The plain truth is this: removing tariffs for vast, unmanageable volumes of Australian beef or New Zealand lamb – or, God forbid, allowing zero tariffs on all their produce – could spell the end.”
But speaking to Newsroom ahead of his trip, O’Connor said those fears were misplaced.
“The total volumes that we put into those markets are not massive, both Australia and New Zealand want to complement the input from those beef producers and we don’t want to in any way undermine the value in the marketplace of their product or ours.”
“We hope that ultimately they, too, recognise there has to be compromise, but we are holding out for a commercially meaningful trade agreement, otherwise what’s the point?”
It was a stretch to think the NZ-UK deal could be finalised during his visit, but he was hopeful progress could be made on some of the most sensitive issues with a timeline set for completion, given the significant symbolic value for the UK in being able to show it was open for business post-Brexit.
“We hope that ultimately they, too, recognise there has to be compromise, but we are holding out for a commercially meaningful trade agreement, otherwise what’s the point?”
National Party trade spokesman Todd Muller told Newsroom the Government needed to ensure it secured the same level of “unequivocal free market access for goods and services” from the UK as was being offered to Australia, with a transition period if necessary.
Muller said O’Connor needed to repel any attempt to impose “unnecessary regulations” on agricultural producers to undercut the cost competitiveness of exports.
The environmental chapter, if done properly, could in fact allay the concerns of British farmers about allegedly inferior products flooding the market by showing that New Zealand produced the most environmentally efficient animal products in the world.
When it came to trade talks with the EU, the Government appeared to be “treading water” after 10 rounds of negotiations and needed to get a better understanding of why there was a seeming reluctance to engage in any meaningful way with New Zealand.
Muller was also sceptical about the EU’s demands around geographical indications, which he said were causing concern within the agriculture sector.
“The idea that feta cheese can’t be called feta cheese because we make it so superbly down here just seems a nonsense, just as it would be a nonsense for the Italian growers of kiwifruit not to be able to call it a kiwifruit…
“What counts is the quality of the product, the branding and your relationship with the consumer, not trying to come up with acutely defensive and anti-competitive mechanisms to stop trade.”
Esther Guy-Meakin, the Meat Industry Association’s senior manager for strategy, trade policy and advocacy, told Newsroom the organisation appreciated O’Connor’s willingness to travel given Covid restrictions and was hopeful he could encourage a more meaningful offer from both the UK and EU.
Guy-Meakin said she understood British farmers’ apprehension about what trade liberalisation would mean for them in a post-Brexit world, but said New Zealand had shown itself to be a responsible actor that would not “flood the market” with substandard produce.
“Our farmers don’t receive subsidies, our sector is very much exposed to market dynamics and we’re global traders – we export to 110 different markets around the world and as a consequence we sell our product to where our customers are willing to pay the highest price for it.”
The lack of movement from the EU on its market access was a concern, and undermined its credibility as a supposed world leader on trade policy, she said.
Dave Harrison, Beef + Lamb NZ’s general manager for policy and advocacy, said he was not surprised by the reaction of British farmers to the potential terms of the Australia and New Zealand deals, as it was unlikely they had ever thought a zero-tariff offer would be on the table.
However, UK media had tended to “lump together” the two countries when talking about farming conditions, even though there were significant variations in practice.
“They talk about these massive cattle stations in North Queensland and the scale on which they operate, the use of growth hormone products which just have no real relevance to the New Zealand context, but they don’t get that.”
The fact that New Zealand was not fully using its current quota limits for sheep meat exports to the UK showed that having access to a market did not mean the country would exploit it, Harrison said.
