Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

143. To ask the Minister for Agriculture, Food and the Marine the negotiations that have taken place to ensure access to the Chinese market for dairy produce from Ireland and other states of the European Union on the same basis as New Zealand and Australia; and if he will make a statement on the matter. [6624/15]

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The development of a dairy and agri-food export market for Irish produce in China has been a priority for me since becoming Minister. I strongly believe that progress to date can only be viewed as very positive, with the added bonus of a huge latent potential remaining to be developed on an ongoing basis, as we increase production following quota abolition.

As Minister for Agriculture, I have headed two trade missions to China, with dairy market development a significant feature in both. Ireland's dairy offering resonates with Chinese consumers who place safety, traceability and sustainability at the core of their value proposition. Uniquely amongst EU Member States, Irish dairy plants received a 100% approval rating during a Chinese Inspection visit in 2014. As part of my last mission I hosted a highly successful dairy seminar attended by key Chinese buyers and media.

Australia and New Zealand are traditional suppliers of dairy products to the Chinese market and have entered into bilateral agreements with China that involve commitments to remove tariffs within specific timeframes, depending on the product sector or subsector. Additionally, both countries are members of the Trans Pacific Partnership (TPP), a group of countries that includes both China and the United States, who are in the process of negotiating a pluri-lateral free trade agreement. Clearly the outcome of the TPP agreement will set the benchmark for future negotiations between the EU and China on market access for dairy products.

The Irish dairy sector would benefit greatly from such an arrangement. However, negotiations on Free Trade Agreements come within the remit of EU Commission, based on a mandate from the EU Council of Ministers. It is not within the gift of any individual EU Member State to negotiate a bilateral trade deal with China.

Negotiations for an update of the 1985 Trade and Economic Cooperation agreement between China and the EU were launched in 2007. However these negotiations stalled in 2011 due to divergences between the mandates and expectations of both sides. Essentially, Member States normally pressing for trade liberalisation, found themselves on the defensive regarding the access sought by China to the EU market, particularly for the automotive and electronic sectors.

Instead, the decision was taken to focus initially on investment and in late 2013 the Council authorised the EU Commission to initiate negotiations for a comprehensive EU-China investment agreement. It is unlikely that any serious progress can be made on an updated Trade and Economic Cooperation Agreement until the investment agreement is finalised.

Notwithstanding this, the Irish Dairy sector has made extraordinary strides in China in recent years. While a large proportion of dairy trade into China from countries such as New Zealand can be categorised as bulk commodity, for instance whole and skimmed milk powders, Ireland has an evolving focus towards, and competes at, the higher value end of the Chinese dairy market. In the infant formula sector, Irish based products are viewed as super-premium brands. China is now Ireland's second largest export market for dairy produce, compared to 13th in 2008. In total, companies based in Ireland exported almost €400m worth of dairy produce to China in 2014. This is an increase from just €104m in 2010 and highlights the huge rate of growth in our dairy exports there in a short space of time.