TL;DR: New Zealand Trade Minister Todd McClay is advocating for minimal compliance obligations for NZ beef exporters under the EU’s new rules aimed at combating global deforestation. With the regulations set to impose significant fines and the potential to impact NZ’s beef trade with the EU, McClay emphasises NZ’s low deforestation risk and seeks assurances for a streamlined compliance process.
In the face of the European Union’s latest initiative to curb global deforestation through stringent new rules, New Zealand’s beef industry is on alert.
The regulations, passed last June by the EU, mandate that exporters to its 27 countries prove their products have not contributed to deforestation since the end of 2020. Failure to comply could result in fines amounting to 5% of global turnover, posing a substantial threat to international trade relations.
Recognizing the potential challenges posed by these new requirements, Trade Minister Todd McClay has been proactive in seeking assurances that New Zealand’s beef exporters will be subjected to the least burdensome compliance obligations. Given the EU’s stance that reporting obligations will vary based on each country’s contribution to deforestation, New Zealand, with its minimal risk profile, is advocating for lighter reporting demands.
The impending compliance deadline at the end of this year and the absence of detailed guidance have heightened concerns among New Zealand exporters. There are apprehensions that the stringent data requirements, particularly if New Zealand were mistakenly classified as a high-risk country, could severely disrupt its beef trade with the EU—a critical market, especially after the recent gains from the free trade agreement.
During a meeting with EU Trade Commissioner Valdis Dombrovskis at the World Trade Organisation ministerial meeting in Abu Dhabi, McClay underscored New Zealand’s low deforestation risk. He highlighted the country’s stringent regulations against native forest felling, suggesting that New Zealand’s practices are on par with, if not surpass, those in the EU.
McClay’s discussions aimed to secure a commitment to a compliance regime that would not impose additional data provision burdens on exporters, leveraging the New Zealand government’s assurances of compliance.
As the EU continues to refine the details of these regulations, the timeline for implementing these new rules remains uncertain.
McClay’s forthcoming visit to Brussels aims to further New Zealand’s case for a low-risk classification, ensuring that its beef exports to the EU continue without undue hindrance. This proactive approach highlights New Zealand’s dedication to environmental stewardship while safeguarding its economic interests on the global stage.
