The EU-New Zealand (NZ) trade deal announced in Brussels on Thursday afternoon means that Irish farmers will have increased competition in EU markets from NZ dairy and beef.

The deal will give 97% tariff-free access to EU markets, with this applying to 91% from day one.

New Zealand currently has a quota for 846t at a preferential 20% tariff for beef and 114,000t of sheepmeat.

The deal increases beef access to 10,000t with a 7.5% tariff, phased in over seven years, and a further 38,000t of sheepmeat has been added tariff-free over seven years also.

NZ currently has access for 47,177t of butter at a 38% tariff - this will be reduced to 5% for 21,000t of this.

A further 15,000t of butter will be allowed access at this new rate, phased in with it applying to 3,750t on day one.

The EU will allow a 25,000t tariff-free cheese quota phased in over seven years and there will be 15,000t of milk powders at a 20% tariff phased in over seven years also.

What it means for Irish farmers

While any increased access to the EU market adds to competition for Irish exports, Irish dairy exports compete successfully with NZ butter and cheese in global export markets.

Therefore, there is minimal risk of NZ flooding the EU market with cheap dairy produce, even with the enhanced level of access.

Similarly, NZ hasn’t been using the full EU-UK sheepmeat access quota for several years, as its markets have developed in Asia, North America and the Middle East and north Africa.

There will be some concern on beef. With the level of access increasing from below 1,000t at 20% tariff to 10,000t, it will be direct competition for Irish exports to the EU.

NZ is currently one of the lowest-priced beef markets among exporting countries, with farmgate prices well below €4/kg equivalent.

NZ exported 850,000t of beef in the year to 30 September 2021, with more than half of this going to China and 212,000t going to North America.

EU less generous than UK

The deal has not met industry expectations in NZ and was in doubt up the last minute, with a view that no deal was better than a bad deal.

It contrasts sharply with the deal NZ negotiated with the UK, which gives immediate generous tariff-free access leading to unlimited access after 15 years.

This deal will have greater implications for Irish farmers, particularly in the beef sector in the longer term than the deal agreed between NZ and the EU.

Britain is Ireland’s biggest beef market, taking over 40% of all beef exports.

NZ will be an alternative supplier in this market for cheaper imported beef and given the infrastructure already in place in the UK to distribute NZ lamb, they will be ready to hit the ground running with beef exports.

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