Onion growers have secured streamlined access for exports to their prized market, Indonesia.
A deal concluded in Auckland will allow sales to Indonesia without fumigation, which can affect quality.
Instead, there will be checks of consignments of onions at New Zealand packhouses and growing areas, which are verified by the Ministry for Primary Industries (MPI).
Once the MPI is satisfied, it will issue export certification for onion consignments.
The agreement was signed in Auckland between Trade and Agriculture Minister Todd McClay and the visiting head of the Indonesia Quarantine Authority (IQA), Dr Sahat Manaor Panggabean.
A reciprocal part of the pact will ease the sales of Indonesian pineapples in New Zealand.
The deal is an updated co-operation arrangement that covers technical matters, such as enhanced digitisation of export certificates, and biosecurity.
“The co-operation arrangement paves the way for New Zealand and Indonesia to boost our $3 billion two-way trade,” McClay said.
“This is a significant step forward that will save our growers time and money, and it demonstrates Indonesia’s confidence in New Zealand’s strong biosecurity processes.”
The agreement has been long in the making, but it comes amid warnings that the tide is turning globally against free trade. Symptoms of this include stiff tariffs imposed on Chinese EVs by both the United States and the European Union, as well as the continued disabling of the WTO’s appellate court by the US. In addition, US presidential candidate Donald Trump is proposing 10% tariffs on all goods coming into the US.
In a speech, last week, New Zealand’s chief trade negotiator, Vangelis Vitalis, said the golden age of trade, from the 1990s til 2016, was over, and “the jungle is growing back”.
Vitalis said the best option for New Zealand in this situation is to try to enhance the value of the trade agreements it already has.
New Zealand has a 14-year-old free trade deal with the 10-country Association of South East Asian Nations (ASEAN), of which Indonesia is a member. The Indonesian economy has been growing at around 5% for several years, according to the IMF, and Vitalis mentioned Indonesia in his talk as a country New Zealand should focus on.
New Zealand and Indonesia have had trade difficulties in the past, including a five-year dispute over beef sales, which New Zealand won. But a veteran trade authority, Stephen Jacobi, thinks Indonesia is still a good prospect for this country.
“Agreements like this one are useful. I mean, onions are not going to transform the New Zealand economy, but it is important to have the best possible access to the Indonesian economy.
“The biggest thing would be if they join CPTPP, which they say they would like to do. Indonesia is a very large, important potential market for us we have had a lot of trouble with over the years, so anything we can do to get access is a good thing.”
For the onion industry, this deal is big. Onions dwarf other vegetable exports, with the next largest contender, buttercup squash, just a fraction of the size. Around 85% of all onions grown in New Zealand are exported, and Indonesia is by far the biggest target, paying $45 million to exporters from here.
