New Zealand's Dairy Sector Challenges Swiss Trade Deal Terms

New Zealand's dairy industry has raised concerns over potential exclusions in a trade deal with Switzerland, emphasizing the importance of retaining comprehensive terms. The warning comes in response to comments made by Switzerland’s trade minister in Auckland, who indicated that reducing tariffs on New Zealand's dairy exports would be a contentious issue. Currently, Switzerland imposes an average applied tariff of 98% on imported dairy products, with out-of-quota duties on butter and milk powders exceeding 300%.

Fonterra’s General Manager of Trade Strategy, Justine Arroll, underscored the need for an all-encompassing agreement. Arroll highlighted that no developed country has previously excluded dairy from bilateral trade agreements with New Zealand, even those with significantly protected agricultural sectors. She cautioned that yielding to Swiss demands might weaken New Zealand's negotiating position in future trade agreements.

The prospect of excluding dairy has also sparked criticism from political figures. Labour Party trade spokesperson Damien O’Connor questioned the government's negotiation strategy, drawing parallels to recent trade discussions with India where major dairy concessions were similarly omitted. O’Connor pointed out that dairy is New Zealand’s largest single goods export and suggested that sidelining this sector undermines the core objectives of bilateral trade policies.

Traditionally, Switzerland has offered only limited, ad hoc concessions on dairy in its international trade agreements. As the discussions progress, New Zealand’s dairy industry and political figures continue to advocate for the inclusion of dairy to ensure a robust and equitable trade deal with Switzerland.