Trans Pacific Partnership conclusion on dairy 'far from perfect,' says Fonterra

By Mark ASTLEY contact

- Last updated on GMT

Trans Pacific Partnership (TPP) talks, designed to simplify trade between the Pacific Rim nations, were launched in 2011.
Trans Pacific Partnership (TPP) talks, designed to simplify trade between the Pacific Rim nations, were launched in 2011.

Related tags: New zealand dairy, Milk

Fonterra has blamed the "entrenched protectionism" of the US dairy sector for the "far from perfect" conclusion to Trans Pacific Partnership (TPP) negotiations. 

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam concluded four years of TPP talks on October 4. 

Launched in 2011, the aim of the talks was to improve and simplify trade between the Pacific Rim nations. 

Under the new trade agreement, New Zealand dairy exporters will have access to the 12 TPP markets through new quotas.

In addition, tariffs have been eliminated on a number of so far unspecified dairy products.

In a statement,​ Fonterra chairman, John Wilson, acknowledged it had been "an enormous undertaking" ​but said the conclusion was "far from perfect." 

“Dairy has been very hard to resolve and New Zealand has managed to get some progress against the odds,”​ he said.

“While I am very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the US, Canada and Japan."

"Greater benefits will be seen in future years as tariffs on some product lines are eliminated," ​he added.

The National Milk Producers Federation (NMPF), US Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA) - who collectively represent the interests of American dairy producers, processors and exporters - thanked US TPP negotiators for their efforts.

"We look forward to reviewing the agreement's dairy provisions as they become available,"​ said Clay Hough, senior group vice president, IDFA.

In a separate statement, NMPF and USDEC said they "will carefully review the agreement's dairy provisions in the coming days."

In 2014, a coalition of US dairy industry stakeholders threatened to retract their support for the trade deal​ if Japan and Canada continue to refuse "comprehensive market access for US dairy products.​"

Later, 21 US Congressmen accused Canada of being “unwilling to seriously engage in market access discussion regarding dairy.”

Having "fought hard"​ against such demands, Canada has granted market access equivalent to 3.25% of its 2016 milk production forecast, an "initial assessment"​ by Dairy Farmers of Canada (DFC) suggests. 

“We obviously would have preferred that no additional market access be conceded in the dairy sector,”​ said Wally Smith, president, DFC.

"However, we recognize that our government fought hard against other countries’ demands, and have lessened the burden by announcing mitigation measures and what seems to be a dairy compensation package, to minimize the impact on Canadian dairy farmers and make up for cutting growth in the domestic market."

"The government has clearly understood the importance of supply managed dairy farms in rural Canada and the economic activities they generate,"​ Smith added.

Related topics: Regulation & Safety

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