In light of the recent Irish agri-trade mission to China, it is an opportune time to examine the state of EU Trade Relations with that state.
Global demand for internationally traded dairy products is increasingly dominated by Chinese demand. Yet the only developed dairy export economy with a Free Trade Agreement (FTA) with China remains New Zealand.
While Ireland has undoubtedly benefited greatly from the increase in Chinese demand, the growth has been much slower than what New Zealand has achieved. Latest New Zealand statistics to June 2014 show annual dairy exports to China of over €3.7 billion.
These exports have increased more than tenfold since 2008. This is a staggering 14 times the rapidly increasing €270 million of dairy exports that we supply the Chinese market from all of our co-ops.
To further put in context, the New Zealand dairy export to China alone is bigger than the total Irish dairy exports last year to all countries in the globe of €3.1 billion.
So why is this? In part, this growth has been because New Zealand has established a free trade agreement with China since 2008.
Ireland is now reliant on the EU as a block to negotiate its trade agreements, and while a lot of bilateral work is ongoing with many countries, China remains on the back burner.
It has not just been the massive reduction of dairy tariffs that has benefited New Zealand. It is obvious that Chinese companies have seen the signing of the agreement with New Zealand as a clear signal their government was in favour of them doing business with New Zealand.
Australia at present is also attempting to push for a similar agreement with New Zealand but it is currently on a slow drive to completion.
A ‘declaration of intent’ was signed last week between China and Australia, committing to the reduction of tariff barriers in China from Australian dairy on an unspecified future timeline, but this deal still has some way to go.
It is clear that the Irish trade mission has been a great success with many of our key farmer owned co-operative brands making significant inroads in the Chinese consumer and service markets.
An FTA is not the be all and end all for our co-operative businesses but an EU- China FTA would undoubtedly help, and put us on a level playing field with New Zealand.
ICOS is willing to work with the Irish government to on the ground in Brussels to lobby for the development of such an agreement.
Conor Mulvihill, ICOS European Affairs Executive.