Audio: Taiwan-New Zealand Trade Agreement Shouldn’t Slow U.S. Meat Exports
Published: Jul 29, 2013
00:00 / 00:00
You may download the audio file here
Officials from New Zealand and Taiwan recently announced a trade agreement that will eliminate duties on Taiwan’s beef imports from New Zealand in just two years. (The agreement is expected to enter into force Jan. 1, 2014, but this timeline is subject to each side’s ratification processes.) With Taiwan being a red-hot market for U.S. beef exports, should U.S. producers be concerned about a price advantage for New Zealand?
U.S. Meat Export Federation (USMEF) Economist Erin Borror says that while the duty reduction schedule in the Taiwan-New Zealand agreement is very aggressive, it shouldn’t have a major impact on U.S. beef exports. She notes that Taiwan’s current duty rate for most beef products is already relatively low – about 15 cents per pound, which equates to an average of 4 percent on U.S. beef cuts. She adds that much of the U.S. beef exported to Taiwan is chilled, Choice-grade product, whereas New Zealand primarily exports frozen, grass-fed beef to Taiwan.
Pork cuts from New Zealand are currently subject to a 12.5 percent duty in Taiwan. While these tariffs will be eliminated immediately upon implementation of the free trade agreement, this change is expected to have no impact on the market. New Zealand exports very little pork worldwide and is not likely to become a supplier to Taiwan, even with this price advantage.
After slumping in 2012 due to regulatory issues related to beta agonists, U.S. beef exports to Taiwan have roared back at a record pace this year. Through May, exports to Taiwan totaled 13,561 metric tons valued at $106.7 million. That’s more than double the total from a year ago, and easily exceeds the pace established in the market’s peak year of 2010.
While U.S. pork exports to Taiwan still face a zero-tolerance policy for beta agonist residues, the market has shown improvement in recent months. Exports in May were robust, pushing the year-to-date total 21 percent higher in volume (9,824 mt) and 18 percent higher in value ($21.5 million) compared to last year’s low levels.
TRANSCRIPT:
JOE SCHUELE: In this U.S. Meat Export Federation report, we speak with USMEF economist Erin Borror about the free trade agreement recently announced between New Zealand and Taiwan. Taiwan is a red hot market for U.S. beef exports and Borror says the small price advantage gained by New Zealand under this agreement shouldn’t change that. Among Asian markets Taiwan already charges some of the lowest duties on imported beef.
ERIN BORROR: In Taiwan dollars per kilogram, which ends up being about 15 U.S. cents per pound, and for U.S. exports which are typically higher valued in Taiwan that’s an ad valorem equivalent of about 4 percent, so a relatively low rate, but with New Zealand’s free trade agreement with Taiwan those duties will be cut in half for the first year and eliminated in the second year, so New Zealand would have a bit of a price advantage with their FTA (Free Trade Agreement).
JOE SCHUELE: Borror said U.S. beef exports to Taiwan also typically differ greatly in quality than New Zealand beef.
ERIN BORROR: We are focused mostly on our higher value, grain-fed cuts to Taiwan, for example rib fingers and hind sink those are some kind of key Taiwan items, but we also ship short plates, chuck rolls, short ribs, the same items you would think of for Asia in general, and Taiwan generally demands choice, so we have sort of the U.S. premium already built in that we are supplying these higher-end grain-fed products. So prices matter but U.S. is just supplying a different and a grain-fed product into Taiwan.
JOE SCHUELE: While Pork from New Zealand gains immediate relief from Taiwan’s import duties this should have no impact on the market.
ERIN BORROR: In general New Zealand is not a pork exporter and there is a fairly significant export market for U.S. pork but New Zealand’s pork exports are minimal and we would expect that to remain the same.
JOE SCHUELE: For more on this and other trade issues please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.
U.S. Meat Export Federation (USMEF) Economist Erin Borror says that while the duty reduction schedule in the Taiwan-New Zealand agreement is very aggressive, it shouldn’t have a major impact on U.S. beef exports. She notes that Taiwan’s current duty rate for most beef products is already relatively low – about 15 cents per pound, which equates to an average of 4 percent on U.S. beef cuts. She adds that much of the U.S. beef exported to Taiwan is chilled, Choice-grade product, whereas New Zealand primarily exports frozen, grass-fed beef to Taiwan.
Pork cuts from New Zealand are currently subject to a 12.5 percent duty in Taiwan. While these tariffs will be eliminated immediately upon implementation of the free trade agreement, this change is expected to have no impact on the market. New Zealand exports very little pork worldwide and is not likely to become a supplier to Taiwan, even with this price advantage.
After slumping in 2012 due to regulatory issues related to beta agonists, U.S. beef exports to Taiwan have roared back at a record pace this year. Through May, exports to Taiwan totaled 13,561 metric tons valued at $106.7 million. That’s more than double the total from a year ago, and easily exceeds the pace established in the market’s peak year of 2010.
While U.S. pork exports to Taiwan still face a zero-tolerance policy for beta agonist residues, the market has shown improvement in recent months. Exports in May were robust, pushing the year-to-date total 21 percent higher in volume (9,824 mt) and 18 percent higher in value ($21.5 million) compared to last year’s low levels.
TRANSCRIPT:
JOE SCHUELE: In this U.S. Meat Export Federation report, we speak with USMEF economist Erin Borror about the free trade agreement recently announced between New Zealand and Taiwan. Taiwan is a red hot market for U.S. beef exports and Borror says the small price advantage gained by New Zealand under this agreement shouldn’t change that. Among Asian markets Taiwan already charges some of the lowest duties on imported beef.
ERIN BORROR: In Taiwan dollars per kilogram, which ends up being about 15 U.S. cents per pound, and for U.S. exports which are typically higher valued in Taiwan that’s an ad valorem equivalent of about 4 percent, so a relatively low rate, but with New Zealand’s free trade agreement with Taiwan those duties will be cut in half for the first year and eliminated in the second year, so New Zealand would have a bit of a price advantage with their FTA (Free Trade Agreement).
JOE SCHUELE: Borror said U.S. beef exports to Taiwan also typically differ greatly in quality than New Zealand beef.
ERIN BORROR: We are focused mostly on our higher value, grain-fed cuts to Taiwan, for example rib fingers and hind sink those are some kind of key Taiwan items, but we also ship short plates, chuck rolls, short ribs, the same items you would think of for Asia in general, and Taiwan generally demands choice, so we have sort of the U.S. premium already built in that we are supplying these higher-end grain-fed products. So prices matter but U.S. is just supplying a different and a grain-fed product into Taiwan.
JOE SCHUELE: While Pork from New Zealand gains immediate relief from Taiwan’s import duties this should have no impact on the market.
ERIN BORROR: In general New Zealand is not a pork exporter and there is a fairly significant export market for U.S. pork but New Zealand’s pork exports are minimal and we would expect that to remain the same.
JOE SCHUELE: For more on this and other trade issues please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.