Singing the same song on free trade

Britain’s decision to leave the European Union has shaken the Netherlands, but the move is unlikely to mean short- term changes to the Dutch- NZ trade relationship, says Foreign Minister Bert Koenders.

The Netherlands was on similar ground to New Zealand, particularly when it came to free trade, he said.

Speaking to Australian and New Zealand journalists at The Hague, Koenders said Brexit was unlikely to bring any immediate change to his country’s relationship with its Australasian trading partners.

“No, not in the short term,” he said. “I think that we will continue to strengthen our bilateral trade relationships.”

The Netherlands is among the NZO’s Vrij said. But in the Netherlands, the sector is not crying “crisis” just yet.

Nevertheless, farmer confidence has taken a knock and Vrij expects consolidation into fewer farms over time.

Vrij sees the depressed market as resulting from a combination of lower demand from Russia and China, growth in supply from the US and New Zealand, and the end of the quota system, which has seen extra production come from the Netherlands, Ireland, Denmark and Germany.

Vrij does not buy into the idea that there is more to it than just a cyclical downturn. “No, there i s nothing structurally wrong with the dairy market,” he said.

“Everybody in the EU had to get used to the idea that there are no largest European investors in New Zealand, through multinationals Shell, Unilever and rural lending specialist Rabobank.

Fonterra has a joint venture with Dutch premium cheese manufacturer A- ware Foods Group, establishing separate but “mutually beneficial” cheese and dairy ingredient plants in Friesland, in the north of the country.

Whey and lactose from the cheesemaking process goes straight from A- Ware’s new cheese factory to Fonterra’s whey and lactose processing plant next door.

Trade between the countries runs in New Zealand’s favour. Last year, exports to the Netherlands came to $ 809.6 million, while imports were worth $ 559m. Both countries are big dairy producers. Last year the Netherlands produced 14.0 billion kg of milk quotas any more,” he said. As it stands, there i s a drought in France and less hay and maize is being grown.

France, like New Zealand, has a had a big cow cull so it is using less compound feed. Vrij said he was confident that EU farmers could work their way through the issues of oversupply.

“We are confident that we will see lower milk production from the EU, at least until the northern spring next year,” he said.

The introduction of phosphate limits is likely to further inhibit production. This is under discussion in the Dutch government but Vrij expects limits to be in place by January next year.

“The visible impact of that [ on pro- compared with New Zealand’s 21.5b kg.

“International trade is a lifeline for this country,” Koenders said. “We will definitely be proponents of free trade agreements, both with Australia and New Zealand.”

Koenders said there was a risk of protectionism returning.

“We are all struggling with what Brexit will really mean for all of us,” he said. “That it is a loss politically and economically is clear; the question is to what extent will that be the case.”

Hans de Boer, president of the Confederation of Netherlands Industry and Employers , said “We are very unhappy about the Brexit thing ... we regard Britain as one of our friends.”

A Netherlands trade mission and state visit to Australasia takes place late this month and next month. duction] will probably be during the course of next year,” he said.

Dutch farmers have the ability to farm far more intensively without the usual attendant problems with runoff — cows spend about half the year in cow barns, which makes the effluent more containable.

VNO- NCW’s De Boer, like many others spoken to, is strong on free trade. “The trend towards protectionism is on the decline around the world overall and in general we support that trend because we believe that sectors should be able to act on their own,” he said.

“If there was one sector that could survive, it would be the Dutch agriculture sector.”

Jamie Gray travelled to the Netherlands courtesy of the Dutch government ahead next month’s trade mission and state visit.