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New Zealand ambassador to Ireland Trevor Mallard hosted a reception in the embassy on Thursday evening to welcome the trade deal with the EU coming into effect at the beginning of May.
As is usual on these occasions, it is a gathering of industry representatives and Government officials that have some level of engagement with New Zealand.
Given the similarities between New Zealand and Ireland, particularly in relation to agriculture, it was no surprise to see the sector well represented.
Collaboration and competition
The New Zealand-Ireland relationship in relation to farming and the agri-food industry enjoys huge collaboration on issues in relation to production and tackling the difficult issue of livestock emissions.
However, when it comes to markets, that is more comparable to rugby, where competition prevails and hence a certain caution from the Irish perspective when it comes to increasing New Zealand access to the EU market.
Concluding this trade deal was particularly sensitive, given the hugely successful negotiation that New Zealand had with the UK in securing access for beef, dairy and sheepmeat.
Access to the EU market through the deal that was being celebrated isn’t quite so generous, but it still marks a significant increase compared with what went before.
While Irish farmers and the wider agri-food industry would prefer that access to the EU market was more tightly controlled, the reality is that the EU has, over the past decade, become probably the world leader in advocating freeing of trade.
This doesn’t suit the highly regulated and consequent high-cost production systems of EU farming, but the direction of travel in this respect isn’t likely to change anytime soon.
Distance remains a barrier
While removal of tariffs makes market access easier for exporters and New Zealand will become a stronger competitor to Irish exports in the years ahead, particularly with the current very competitive prices they can offer, growing the EU and UK market will still be a challenge.
The distance that New Zealand is from the European market is also a barrier, in that the lead-in time for deliveries is counted in weeks, whereas orders from Ireland can be delivered to the UK in hours and to the EU in a day or so.
That fits best for supermarkets and food service outlets that work with a just-in-time delivery system to minimise the level of stocks they have to carry.
The main market for New Zealand products is likely to be secondary manufacturing businesses or businesses that are comfortable carrying a level of stock.
The other feature of geography that protects Irish and European producers is the fact that New Zealand has lucrative markets for their beef, dairy and sheepmeat much closer to home.
They are ideally positioned to service the growing Asian market and China has replaced Europe as their main market for sheepmeat exports several years ago.
Similarly, New Zealand agri-food products are well established in North American markets, so the EU and UK becomes a welcome addition to these as an option, but it isn’t foreseeable that it will replace any existing market.
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