Editorial: Aussie move a trade decision

Last updated 05:00 10/02/2014

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OPINION: A further irritant in the trans-Tasman relationship flared up last week with the decision of the supermarket companies Coles and Woolworths to stop selling New Zealand vegetables in some produce lines in Australia.

Labour trade spokesman Phil Goff called the decision a "fundamental threat to New Zealand exporters" and a breach of Australia's obligations under the Closer Economic Relationship (CER) signed more than 30 years ago.

Prime Minister John Key said the move was possibly a violation of CER, in spirit if not legally.

Buy NZ Made executive Scott Wilson said that vegetables, cheese and frozen food exports from New Zealand had been affected.

The supermarket giants' move should be seen not so much as anti-New Zealand as a response, they say, to consumer demand to "buy Australian".

This is harder to argue against, especially when foodstuffs are concerned. Most New Zealanders would probably want to "buy Kiwi" when it comes to food from their own supermarkets, and some people take that desire even further, for example opting as far as possible for locally-produced fruit and vegetables from farmers' markets and fresh-food retailers.

The difficulty for New Zealand producers in this case is that Coles and Woolworths command about 80 per cent of Australia's supermarket trade, putting at risk New Zealand exports that could run into hundreds of millions of dollars.

That is why Goff exhorted Key to raise the matter in his talks with Australian Prime Minister Tony Abbott late last week and why Key took up that call. Among those producers affected are the Talley's group and up to 100 Canterbury growers.

If Key and the Government's advisers believed the supermarkets' policy violated CER then of course he was entitled to raise that at a bilateral level.

However, as the long dispute over Australian access to New Zealand apples should tell us, such discussions will not automatically reopen the market.

As Abbott showed in his response, his government is as unlikely to direct Australian retailers to put Kiwi produce back on their shelves as a New Zealand government would do here.

Also, neither government has any mandate to tell consumers what to buy - and catering for the consumer is claimed as the baseline motivation here.

In short, therefore - and this will bring no comfort at all to Kiwi growers - it is unlikely New Zealand can bring any real, ongoing pressure to bear in this case.

Unfortunately, it is part of the vagaries of world trade, and a consequence of a small country dealing with very large overseas companies who, at a stroke, can make decisions which significantly affect New Zealand exporters.

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China has overtaken Australia as our largest export market. As with all trade, we must pursue opportunities wherever they arise.

- © Fairfax NZ News

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