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Agricultural Trade

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Modelling of international trade by Lincoln University researchers highlights a future risk for New Zealand Agriculture in any restructuring of international agricultural trade under WTO rules.

The risk is that New Zealand may loose the privileged position in terms of quota allocation that has been negotiated for market entry into specific markets particularly in Europe and US.

The model results sound a clear warning that the UK butter and lamb quotas are currently yielding prices well above the norms of international trade and that if they were folded into a new multilateral trade agreement returns would decline significantly.

It seems our obsession with demands for a level international trade playing field may not be as rewarding as at first thought. Our negotiators of the past may have acquired gains that are now taken for granted and there value diminished or seldom quantified.

Tariffs, subsidies and trade barriers have tended to become rolled into one in the minds of NZ producers. Recognition that our existing trading privileges are an advantage that should not be relinquished lightly is apparent from the Lincoln model.

In fact the most important agriculture trade issue for NZ may be agreements the restraining of the ‘leaks’ from internal subsidies of the major northern economies onto the international ag markets

Good farming




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