New Zealand dairy sector voices gloom over TPP deal

Representatives of New Zealand's biggest export industry Tuesday expressed disappointment at the 12- nation Trans-Pacific Partnership deal agreed in the United States.

New Zealand negotiators failed to gain the same significant market access for the pillar dairy industry as they did with other export commodities, leaving industry insiders to express hope of a better deal in the distant future.

New Zealand dairy exporters will have preferential access to new quotas into the United States, Japan, Canada and Mexico, in addition to tariff elimination on a number of products, said a government briefing paper.

The failure to get better access for dairy was the "simple reality of world politics," Trade Minister Tim Groser told Radio New Zealand.

"Of course I would have wanted a better dairy deal than this, but at the end of the day, the decision as you go up to 5 o'clock in the morning with the conference finishing two hours later, you take what you can get," said Groser.

Prime Minister John Key also said the government was " disappointed there wasn't agreement to eliminate all dairy tariffs. "

Fonterra Co-operative Group Ltd. chairman John Wilson said the entrenched protectionism demonstrated by the U.S. dairy industry in particular had ensured that the deal on dairy failed to reach its potential.

"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 U.S., Canada and Japan," Wilson said in a statement.

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

The Dairy Companies Association of New Zealand (DCANZ) also voiced disappointment.

"It was always going to be very hard given the starting point for dairy as one of the most protected sectors globally," DCANZ chairman Malcolm Bailey said in a statement.

"While further market opening is needed to help address price volatility in the global dairy market, the deal does contain some useful improvements."

The Federated Farmers industry group said the tariff savings of 102 million NZ dollars (66.23 million U.S. dollars) for dairy exports would still boost the economy and improve competitiveness in TPP markets.

"While it would have been great to see dairy tariffs eliminated altogether and for a greater range of products, preferential access to new dairy quotas into these markets should be helpful. Overall dairy will still reap the benefits of tariff savings into other TPP markets and further progress on dairy access can be made in the future," president William Rolleston said in a statement. Endi