Key confident of Indonesia beef deal

John Key and Joko Widodo (Getty)
John Key and Joko Widodo (Getty)

Prime Minister John Key believes real progress has been made on securing a better deal for New Zealand farmers trying to export beef products to Indonesia.

And he's hopeful the matter will be resolved before the World Trade Organisation comes back with its decision on New Zealand's challenge to Indonesia's prohibitive trade rules.

Mr Key is in Indonesia on a whirlwind two-day visit aimed at boosting ties between the two countries. He met with his Indonesian counterpart Joko Widodo in Jakarta on Monday afternoon.

Indonesia's import restrictions on beef products have been a stumbling block in its relationship with New Zealand.

Since the trade barriers were imposed in 2011, New Zealand's beef exports to Indonesia - once New Zealand's second largest market for beef products - have declined about 80 percent and the accumulated impact for the sector is now estimated at between $500 million and $1 billion.

Following Monday's meeting, Mr Key said he felt "a lot more confident" that there would be a resolution to the issue, possibly before the WTO hands down its decision..

"There's been a very good and engaging discussion that's taken place with the Trade Ministers, the Minister of Agriculture and the President himself. I feel a lot more confident than I did 24 hours ago."

That would be a win-win for both parties.

"Beef prices are high here and there's no question New Zealand exporters - being able to export the sorts of cuts we would potentially send here - would put into the marketplace a high quality product, but at a lower price," Mr Key told reporters.

"I think it's a positive all-round, but like all these things we just have to make sure that gets concluded."

Meanwhile, New Zealand is also looking to export cattle to Indonesia for breeding purposes.

Mr Key said progress is being made on that front, but it's a matter of finalising a number of protocols, including making sure Indonesia meets animal welfare expectations.

New Zealand already exports cattle for breeding purposes to a number of markets.

Mr Key didn't know how many cattle could be sent to Indonesia, or when exports could start.

NZ'S trade beef with Indonesia by the numbers:

NZN / Newshub.