U.S. trade officials this week announced that they will begin negotiations with Trans Pacific Partnership (TPP) members New Zealand, Singapore, Chile and Brunei. Australia, Peru and Vietnam also want membership in the agreement, which supporters say will help ensure that the United States is not left out of regional trading arrangements in one of the most dynamic regions of the world.
The first round is due to start on March 15 in Australia, which already has a bilateral free-trade agreement with the United States, something New Zealand has been unsuccessfully seeking for years.
"The complexity of TPP negotiation becomes quickly apparent when the interests of eight participants require consideration. Many will try to characterize this as a bilateral agreement for New Zealand with the United States, but it is much more than that," said Mike Petersen, chairman of Meat and Wool New Zealand. ""The TPP has the potential to deliver new trade flows in the powerhouse Asia/Pacific region. Different options to achieve this have previously been promoted but TPP has the potential to deliver a big prize through its 'ground-up' approach of like-minded countries working together."
The United States is New Zealand's largest beef market taking 171,000 tons (47% of New Zealand's total export volume) for the production year ending September 2009, and it generated NZ$793 million (42% of New Zealand's total beef exports by value).
The United States imported 171,000 tons of New Zealand beef for the 12 months ending September 2009 under New Zealand's Country Specific Tariff Quota (CSTQ). For this quota, there is an in-quota tariff of US4.4c/kg. This amounts to around NZ$10.3 million paid in tariffs. The out-of-quota tariff is 26.4%.
New Zealand pays tariffs of US0.7-2.8c/kg on sheepmeat exports to the United States. The United States is New Zealand's second most valuable market for lamb behind the European Union. New Zealand exports around 19,000 tons of sheepmeat to the United States worth about $236 million annually.
New Zealand exported 2,151 tons of wool (clean) to the United States in the 12 months ending September 2009. Total wool exports to the United States including value-added products, were worth approximately NZ$24.2 million. The tariff on wool fiber ranges from zero to in excess of US18.7c/kg clean.
According to American Sheep Industry Association Executive Director Peter Orwick, "In contrast to beef, the tariff on lamb imported to the United States is less than a half penny per pound and lacks any quota or tariff rate quota to cap trade or prevent surges of product."
Reprinted in part from Voxy, NZ