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New Zealand horticulture sector positive over CPTPP trade deal

The wider New Zealand horticulture export sector sees substantial a opportunity following the signing of an agreement on the Comprehensive Progressive Trans Pacific Partnership (CPTPP) trade deal.

New Zealand Horticulture Export Authority CEO Simon Hegarty says: “We welcome this outcome, particularly with Japan’s inclusion in the CPTPP providing for elimination of an estimated NZ$48m in annual tariffs. While the refined CPTPP now involves 11 countries resolving a range of trade issues, tariffs are a prominent trade barrier component for some key markets.

Japan is our 2nd largest market so its inclusion is significant for the future growth of the New Zealand horticulture export sector. Tariffs paid by the NZ horticulture export sector across the remaining CPTPP markets are comparatively low (or already at zero) based on existing trade agreements (e.g. CER with Australia, the AANZFTA with ASEAN members). We are very confident that our full product range is included in this CPTPP deal which will ultimately see all tariffs to zero.”

New Zealand exports approximately 60% of its annual horticulture production, at a value of NZ$3.5 billion and the CPTPP countries are the destination for $1.22 billion (35%) of that total. Within the CPTPP group, Japan is the destination for NZ$5731m Free on Board (or just under 50% of our CPTPP trade value) however, it accounts for 99% of the estimated $48.5m in tariffs NZ exporters paid in all CPTPP markets in 2017.

Japan’s 6.4% tariff on kiwifruit alone amounted to an estimated cost of $26m - $30m or an average $10,300/grower, the cost to the 30 buttercup squash export growers from the 3% tariff in that market was $1.53m or an average of $50,600 per grower, and the 8.5% tariff on onion exports to Japan cost an average $19,500 to each of the 90 commercial onion growers.

“We see the benefits most clearly in Japan, where New Zealand kiwifruit growers paid over $26 million in tariffs last season. This tariff relief will means savings for our growers and benefits for Japanese consumers by supporting our competitiveness against other fruit in market,” says Zespri Chief Executive Dan Mathieson.

Hegarty: “Acknowledging and recognising the work of many over the years, securing this agreement is a major and welcome achievement. Eliminating trade distorting tariffs in our key export markets and maintaining our international competitiveness is an ongoing challenge, yet fundamental for the future - we can’t flourish without access to markets and this agreement enhances that access.”

For more information:
Simon Hegarty
NZ Horticulture Export Authority (HEA)
Mobile phone: +64 21 708 147

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