Kiwi exporters in limbo as talks go on backburner

Exporters to Russia are disappointed by news that free trade talks with that country have been put on the backburner.

The deal, which has been underway for more than three years, was close to being signed before New Zealand announced its opposition to Russia's decision to send troops into the Ukraine's Crimea region.

Trade Minister Tim Groser was in Russia on Monday when Prime Minister John Key suspended the talks.

Catherine Beard, chief executive of Export NZ, said a hold-up of free trade talks was never good. "They take time to get over the line and I guess . . . when you do resume, you're not necessarily picking up where you left off."

She said there were good opportunities for New Zealand exporters of niche or luxury products to get ahead in Russia but dairy, meat and horticultural products generally faced tariffs.

A free trade agreement between New Zealand, Russia and its two Customs Union partners, Belarus and Kazakhstan, would be Russia's first international FTA. However, domestic opposition in Russia to agricultural exports from overseas was considered one of the biggest hurdles.

Kiwifruit exporter Zespri is expected to be one of the big beneficiaries of any such deal, but a spokesperson said the relevant official was not available to answer questions.

David Boyd, a director of Foot Science, an orthotics products manufacturer in Christchurch, has exported to Russia for 10 years and it was "a very important part" of his business.

Boyd said the tariff his firm faced was small but he thought everyone involved in trading with Russia would be disappointed at the FTA's suspension, which was as much about ease of business as it was about tariffs.

"But it is a very difficult thing that they [Russia is] are setting out to achieve, and these things take time. It's more important that we get this done in the right way."

In Feilding, seed-sowing machinery exporter Baker No-Tillage said its business deal was now up in the air.

"At the end of the day we are just waiting to hear what the Government's official position is," founder John Baker said. If a trade embargo ensued, it "will hurt us".

Russia is thought to be mostly interested in New Zealand technology and expertise to help modernise its agricultural sector.

Three weeks ago, a Russian delegation made a one-day visit to Wellington to research the ease of doing business here.

They talked to Economic Development Minister Steven Joyce about New Zealand's relatively simple company registration system.