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NZ hopeful of progress on trade beef

NZ NewswireNZ Newswire 17/07/2016 By Sarah Robson

Prime Minister John Key is "reasonably confident" New Zealand can resolve its ongoing stoush with Indonesia over Kiwi beef exports.

Mr Key and Trade Minister Todd McClay are leading a 22-strong business delegation on a whirlwind two-day visit to Indonesia aimed at boosting ties between the two countries.

Indonesia is New Zealand's 13th largest trading partner, with two-way trade worth about $1.6 billion a year.

But with a population of more than 250 million, a growing economy and an expanding middle class, there's room for New Zealand exporters to do more.

One of the stumbling blocks in the relationship has been Indonesia's import restrictions on beef products, which are the result of a domestic political push for Indonesia to become self sufficient.

Since 2010 there's been an 80 per cent decline in beef exports to Indonesia - once New Zealand's second-largest market for beef products - and the accumulated impact for the sector is now estimated at between $500 million and $1 billion.

The government is waiting for the outcome of a World Trade Organisation case it took challenging Indonesia's trade barriers, but Mr Key will still be raising the broader issue of fairer access for New Zealand beef.

"We'd like to have better access to this market, we know that they've got a problem because beef prices are very high here for domestic consumers and we can help reduce those beef prices for them," Mr Key told reporters.

Tim Ritchie from the Meat Industry Association said the import restrictions have hampered the development of a relationship that could be a win-win for both parties.

"Given the volatility and unpredictability of what's going to happen, it's very hard for a meat company to plan production to meet requirements that might be there or might not be," he said.

"Certainly it totally discourages investing in the market in terms of the relationships and doing what you would normally do to integrate into the market."

Mr Ritchie said New Zealand exporters want to be in the Indonesian market for the long haul.

"I think no matter what we want to have a good relationship with Indonesia, we want to help them in their development and we can help with the product, we can help them with technology."

New Zealand believes its WTO case is strong and Mr Key said while it is a matter of wait and see, he is hopeful a resolution can be achieved.


* Indonesia was once NZ's second-largest beef export market, worth $180m per year

* NZ was exporting mostly secondary cuts and edible offals

* Between 2000 and 2010, NZ's beef exports to Indonesia grew from 5000 tonnes a year to just shy of 50,000 tonnes

* Trade restrictions came into effect in 2011, leading to a dramatic decline in beef exports * NZ now exports about 8000 tonnes to Indonesia.

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