Seafood New Zealand Friday Update 31 July 2015



Friday Update is Seafood New Zealand's weekly email from our Chief Executive.

Friday, July 31, 2015


TPP and the seafood industry

Kia ora koutou katoa i roto i te wiki o te reo maori. 
(Greetings to you all in Maori language week).
The protracted Trans Pacific Partnership negotiations are coming to a climax tomorrow.
So what’s in it for seafood?
The talks have been conducted in secret so we cannot be sure but there appears to be no downside and there could be significant gain.
The 12 countries making up the potential bloc – USA, Japan, Australia, Canada, Brunei-Darussalam, Chile, Malaysia, Mexico, Peru, Singapore, Vietnam along with New Zealand – accounted for around 40 percent of our seafood exports in 2014, totalling $590 million.
The most significant tariff liberalisation gains would come from Japan, where tariffs of three to 10 percent are charged on all seafood imports.
Japan trade was worth $100 million last year.
We already have tariff free access to most of the other parties except for Vietnam, Chile and Peru. Vietnam is a $20 million market for New Zealand seafood and an emerging alternative to China and Thailand as an importer of raw material fish for further processing and export. There is unfinished business in Vietnam where full tariff-free access was denied under the free trade agreement between the Asean countries and Australia and New Zealand.
Peru and Chile are significant seafood exporters in their own right and Chile in particular has a product mix of similar species and seasonal production to New Zealand and is therefore a significant competitor.
Full liberalisation of all tariffs on our present level of trade and market mix would produce a benefit of up to $10 million, mostly from Japan, according to seafood trade policy consultant Alastair Macfarlane.
A successful conclusion to the TPP would mean New Zealand would have open access to all its significant seafood markets except the European Union where tariffs of up to 24 percent are still in place.
Sales to the EU in 2014 were $200 million.
There could be other benefits such as reduced subsidies to fishing, which would in turn reduce capacity and over fishing, and less unregulated and illegal fishing.
That would make it harder for illegally caught high value fish such as Antarctic toothfish being passed through ports in Singapore and Malaysia.
But seafood is a small fish in the negotiations in Hawaii this week.
Dairy is a stumbling block, with the highly protectionist US, Canada and Japan all with established resistance to opening up their agricultural sectors to foreign competition.
The Japanese farming sector is  notoriously inefficient but Canada is no slouch in the trade hyprocrisy stakes either with dairy tariffs as high as 246 percent.
The price of medicines and the impact on the drug-buying agency Pharmac are also a public concern that is fuelling internal opposition to the TPP.
Patent protection for some drugs would likely be extended beyond the current 20 years, when cheaper generic drugs can be substituted.
That will add to the drug bill but Prime Minister John Key assures patients will not have to pay more for prescriptions.
That means the Government (read taxpayers) will pick up the extra tab but the official line is that the benefits will outweigh that.
Trust us is the underlying message.
The last time New Zealand tried to force Japan to lift its restrictive trade practices, it ended badly.
In the late 1970s Prime Minister Robert Muldoon threatened to block Japanese access to fishing in New Zealand’s exclusive economic zone unless Japan imported more of our beef.
The pugnacious stance was not well received in Japan and was still an issue more than a decade later.
In 1990 then Prime Minister Geoffrey Palmer told Parliament on returning from a visit to Japan that there was still considerable resentment about the way Muldoon had gone about “ham fisted negotiations involving meat for fish”.
Trade Minister Mike Moore observed the outcome was “they got the fish and we got no beef”.



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In the Media



SeaDragon's new Omega-3 facility under construction. Photo courtesy: SeaDragon.


SeaDragon predicts 60 per cent boost in 2016 sales

NBR (July 28) reported on SeaDragon expecting its annual sales to rise 60 per cent in 2016, helping generate positive pretax earnings. The report said the Nelson-based company forecasts revenue of $10.1 million in the year ending March 31, 2016, up from $6.3 million a year earlier, and expects earnings before interest, tax, depreciation, and amortisation of $144,000, compared to an ebitda-loss of $2.2 million in 2015. The forecast relies on SeaDragon completing its Omega-3 facility this calendar year, building a fractionation plant by July 2016 to make higher value products, the exchange rate remaining at about 70 US cents, gross margin staying largely unchanged, and the company's ability to raise new funds.



Sea lion claims by Forest and Bird challenged

Seafood New Zealand (July 29) responded to claims by Forest and Bird that the biggest threat to the sea lion population is the impact of squid fishing. Seafood New Zealand Executive Chairman George Clement says the latest claim by Forest and Bird that fishing is the biggest threat to the Auckland Islands sea lion population ignores the major body of scientific research that cites a number of non-human factors as the main threats to that colony. 
“To suggest that fishing is the primary threat both ignores the work of eminent scientists in their field who have identified that the decline in sea lion numbers is likely to have resulted from disease and environmental factors and not fishing, demonstrates that Forest and Bird is out of touch with reality,” George Clement says.
Click here to read the full story.




New Zealand among most trusted aquaculture nations

ABNewswire (July 30) reported on a recent survey that found New Zealand was among the most trusted aquaculture nations, alongside Canada and Norway. The survey, which included 1,209 respondents from around the world found New Zealand to be the second most trusted provider of farmed fish after Canada. For regular fish eaters, sustainability of stock was the top concern with about 31 per cent of those surveyed saying sustainability of the fish they eat is the most important influencer on their purchasing decision.
Click here to read the full story.