Free Trade Agreement Underutilisation Overstated
Free Trade Agreement Underutilisation Overstated
The New Zealand seafood industry is confident that the vast majority of its trade crosses borders at the lowest tariff rates, with much of it entering key markets like the US, China, and Australia at zero tariffs. This reassurance comes despite recent concerns raised by Vangelis Vitalis, Deputy Secretary of Trade and Economics for the Ministry of Foreign Affairs and Trade (MFAT), at this year’s Seafood New Zealand conference.
Vitalis suggested that New Zealand seafood exporters were ‘leaving money on the table,’ citing examples where tariff reductions from Free Trade Agreements (FTAs) were not being fully realised by the NZ seafood sector. This revelation prompted further enquiries from market analysts, industry stakeholders, and politicians across the business media.
In response, Aquaculture New Zealand has been working closely with MFAT and Seafood New Zealand to understand the basis for the claim that exporters are missing out on potential savings. FTAs often feature varying tariff levels depending on the product format and internationally standardised product codes. If a tariff applies, importers pay this to their respective customs agencies in each export market.
Aquaculture New Zealand CE Gary Hooper expressed surprise at the assertion, noting, “The sector supports and appreciates the tremendous work of government agencies including MFAT, NZTE, NZ Customs, and MPI in securing advantageous trade agreements as the aquaculture sector exports to over 75 countries. However, we are confident that most of our trade benefits from the lowest tariff rates.”
Vitalis mentioned the recently enacted FTA with the UK as potentially underutilised. However, MFAT has not been able to share trade data with the seafood industry due to a confidentiality agreement with their UK counterparts. Fortunately, NZ Customs has advised that importers can claim a tariff refund for any shipments where tariffs were incorrectly paid within the past 12 months. Aquaculture New Zealand urges all exporters to ensure their importers are aware of this refund option.
Additionally, based on Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) data shared by MFAT, it appears that some importers in Mexico and Canada have paid higher tariff rates than those negotiated under the agreement. Hooper notes that this may have resulted from incorrect product codes, customs officials applying outdated codes, or importers not referencing the latest trade agreements in their documentation. Importantly, these discrepancies were minor compared to total sector exports and did not warrant broader concerns.
Aquaculture New Zealand and Seafood New Zealand continue to work with MFAT and NZ Customs to provide exporters with practical FTA information to share with their importers, ensuring New Zealand seafood crosses borders without leaving any money on the table.
