The New Zealand meat industry is keeping a close eye on a new US-Japan trade deal, with concerns it could erode recent gains in exports there.
New figures from StatsNZ show Japan is now New Zealand's number one market for chilled beef, driven by tariff cuts under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Meat Industry Association trade and economic manager, Sirma Karapeeva, said since the CPTPP came into effect in December last year, overall beef exports to Japan have increased 22 percent in volume and 15 percent in value.
"So far, we have seen two rounds of tariff cuts on beef into Japan. Pre-CPTPP, our beef exports faced a 38.5 percent tariff that has now been reduced to 26.6 percent and will continue to decrease to 9 percent over the next 15 years," she said.
Prior to CPTPP, New Zealand's beef market share had been dropping.
"Under the CPTPP we have now achieved parity with Australia in the market and we are already seeing a rebalance of market share as New Zealand beef has become more competitive."
However Karapeeva said the announcement of a US/Japan trade deal was a cause for concern.
"Despite the US not being part of the CPTPP and their beef exports to Japan attracting a 38.5 percent tariff, US exports remain strong.
"We are keeping a close eye on the US-Japan deal. There are only scant details at this stage, but there are indications that the deal delivers a 'CPTPP-style' outcome."
She said depending on how and when the deal was implemented, it could potentially see the US gain tariff parity with New Zealand and other CPTPP countries and quickly erode New Zealand's market share.
"We will know more about the potential impacts once the details are known."
Figures also show exports to China continue to grow, up in volume by 133 percent compared to August 2018, and 155 percent in value to $NZ111.2 million.
"African Swine Fever and the resulting drop in pork production in China is driving demand for other forms of protein such as beef and lamb and we expect this to continue for the remainder of the year and well into 2020," said Karapeeva.
Outside of China, Japan is the only major beef market where NZ exports have grown this year.
Exports to the US, Canada, Korea and Taiwan have all declined compared to the same period last year.
Total exports of red meat and co-products to most other major markets were down during the month compared to August 2018.
However sheepmeat exports to Japan increased 28 percent in volume and 24 percent in value compared to August 2018.