New Zealand Secures Butter Trade to Europe

“New Zealand has reached an agreement with the European Commission on the long term arrangements covering our butter exports to Europe”, Trade Negotiations Minister, Phil Goff, said today.

"While acknowledging the need to meet the requirements of the European Court of Justice decision on the Egenberger case, New Zealand wanted an outcome that also upheld its trade rights, negotiated and in place for more than thirty years.

"With the current short term arrangements for the import of New Zealand butter into the EU due to expire on 31 December 2006, New Zealand officials have been in intense discussions with the European Commission over the details of a longer term solution. A new regime for New Zealand butter exports to Europe will be implemented from 1 January 2007.

"As part of the package, the tariff for New Zealand butter imported under the quota will be reduced to €700 per tonne from the current rate of €868.8 per tonne, a reduction of 19.43 percent. There will also be a change in the butterfat standard from 80/82 percent to 80/85 percent, with a 3.5 percent reduction in the quota to take account of the higher levels of fat.

“These are important changes to the conditions of entry of New Zealand butter which need to be approved by the Council of the European Union.

“The talks have been difficult and complex. We have had senior officials from MFAT and MAF in daily discussions with the European Commission in Brussels for many weeks.

"I have had long telephone conversations with Agriculture Commissioner Mariann Fischer Boel and exchanged correspondence on the issue. Late on Tuesday evening this week I had two detailed telephone exchanges with the leader of the New Zealand team to finalize the New Zealand approach.

“The final package strikes an appropriate balance between meeting the ECJ ruling and ensuring that the EU’s long established commitments to New Zealand are taken into account.

“The ECJ’s major concern with the previous system was that it was seen to be discriminatory against European traders. The proposed regime resolves this issue, by providing a guarantee to newcomers that they will have access over time to bid for a share of New Zealand butter. The needs of traditional importers, however, are taken into account by guaranteeing them more than half of the New Zealand butter quota.

"The new butter regulation covering the changed regime has been submitted to member states through the EU’s Milk Management Committee and a decision on it is not expected until early next week.

"Given the complexity of the EU regulatory system, some of the changes may not be in place until later in 2007, but officials will be working with the Commission to ensure the earliest implementation possible.

“I have appreciated the efforts that Commissioner Fischer Boel and her officials have put into finding an acceptable outcome for both the EU and New Zealand,” Mr Goff said.

ENDS

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