Tariff Barriers Costing Average Horticultural Exporter $28,000 A Year

I was invited last night to the launch of the latest edition of a study commissioned by Horticulture New Zealand and the New Zealand Horticulture Export Authority on barriers to New Zealand horticulture exports abroad.  Tariff barriers alone are costing the $2 billion export industry $28,000 a year.  There is a summary of some of the report’s findings in today’s Dominion Post but I can’t find it on line.  Stephen Ogden who wrote the report was quite controversial in his comments last night about the priority given to solving market access problems in the horticulture area – particularly quarantibe related problems I agree.  This report is just what the new Government needs.  It contains all the material necessary to measure progress.  The message seems quite clear – we want to grow the economy quicker and this involves expanding our exports faster and maximising returns.  If I were Minister I would be asking for an annual update on progress towards removing the barriers that the authors of this report have identified.

I was asked to write the Forward to this year’s report.  This is what I said:

This is an excellent publication.

 

It reminds us of the importance of the horticulture sector to our economy and to our export performance.  Exports of horticultural products have passed the $2 billion mark – an important milestone.

 

It is an essential resource for our trade negotiators – both highlighting targets in key markets and reminding them of the economic importance of their work.

 

It also reminds the wider economy why trade policy is so important in a trade dependent economy.  Trade policy makes a real difference to real people.  As the study highlights, the China FTA will improve access and returns for New Zealand horticulture producers.  But there is more work to be done.  Tariff protection alone is costing the average horticultural grower in New Zealand $28,000 a year.  The cost of phytosanitary barriers and technical barriers to trade is harder to measure, but I would guess the impact of these on market access, prices, and direct costs to the industry would be at least this amount again.

 

As a former trade negotiator can I testify to the value of this type of report.  Normally reports of this nature are only produced by Governments, and unless there is a specific need (such as an FTA negotiation) reports like this are not written, let alone updated, for all sectors.  I would therefore like to congratulate the Horticulture Export Authority and Horticulture New Zealand for giving priority to undertaking this update.  It is smart policy on the part of the industry because it will short circuit the Government process by making it easier for trade policy officials to do their work, and it will assist in their prioritizing this work. I wish all other sectors would commission similar reports.  Indeed, I think that a report of this nature covering all sectors and all goods and services exported is worthy of consideration.

 

This report usefully reminds us of which countries or customs unions maintain the highest levels of protection against our imports.  As we have a new Government elected, this report is timely as it will help the Government determine its priorities for bilateral and regional trade negotiating activity.  I do not anticipate major changes in emphasis, but this study does remind us of the importance of removing barriers to our horticultural exports to the EU and Taiwan for example. 

 

Finally, I hope that this report is read by consumers in our export markets.  Governments are often far from transparent about the true cost of protection to consumers in their economies.  This report highlights how much the consumer is supporting domestic industry in these markets.  It will hopefully lead to serious questions being asked of Governments by their domestic constituents as to why the many are being taxed so highly to protect the interests of so few.

 

Congratulations to the Horticultural Export Authority and Horticulture New Zealand for commissioning this report, and congratulations to Dr Stephen Ogden and the team at Market Access Solutionz for doing such excellent work.  I am sure this work will be instrumental in improving returns to New Zealand’s horticulture producers.

 

 

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