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The First Five years

Export Standards Group – aligning product groups to the regulatory model

Carol Barnao, Director: Export Standards Group

Accommodating a broader range of products and providing consistency of principles with the regulatory model were key priorities for the Export Standards Group during its first five years.

The Group has been responsible for the regulatory infrastructure that provides consumers with assurances about products’ safety and fitness for purpose. It also negotiates market access conditions with overseas authorities and provides export assurances.

Group role realigned

When NZFSA was formed in 2002, the Group was established as the Dairy and Plant Products Group, bringing together the administration of export standards for wine, dairy, horticultural, arable and organic products. Its name changed to Export Standards in 2005 and its role realigned when NZFSA moved from a sector-based structure to a more horizontal or functional system.

At this point, the Group incorporated many of the functions and staff from the former Animal Products Group, including a market access team.

By 2007 the Group had 45 staff, including 20 based in Auckland. There are four teams:

• Market access (with its own Director)

• Standards and systems: animal products

• Standards and systems: plant products and processed foods

• Certification.

A challenge from day one was to bring consistency to the various sectors in the way their food safety regimes were developed. The dairy industry, for example, while operating along lines used in other food export sectors, has been largely working under a parallel but separate product safety system. Dairy products legislation became more closely aligned to other animal products industries with the passing of the Animal Products (Dairy Products and Other Matters) Act in 2005.

Electronic systems for export certification

The use of electronic systems for facilitating international trade has been growing rapidly, and New Zealand has remained at the forefront of developments.

The New Zealand-developed E-cert system for electronic certification of export shipments went ahead in leaps and bounds during the first five years, and has gained traction internationally. By 2003, all APEC countries had committed to adopting and implementing the model. Australia, Canada and the United States have all endorsed the system, and Canada went ‘live’ on E-cert in 2007. Singapore, Jordan, the United Arab Emirates, Philippines and Indonesia have also recently joined E-cert online.

Recent moves to enable direct links between E-cert and the European Union’s TRACES border control system have the potential to facilitate trade and eliminate delays of weeks or even months. Border inspectors in Europe will be able to view E-cert-derived data on New Zealand export establishments through their own system. Implementing this link could save New Zealand exporters significant time and money.

To ensure standards used for electronic data interchange are accepted internationally, the Export Standards Group has been working through the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). This United Nations body encourages collaboration between governments and private business to secure interoperability. By securing UN/CEFACT recognition of E-cert’s technical IT standards, there will be scope for further government-to-government agreements based on the New Zealand system.

Pesticide residues

Safety in the area of fresh produce has not traditionally been controlled by a New Zealand regulatory regime to nearly the same extent as is the case for animal products. While the main focus for produce is pesticide residues, recent international experience has shown that foodborne diseases can also be an issue.

NZFSA’s Maximum Residues Limit (MRL) database is an important asset for exporters wanting to ensure importing country requirements are met. The database, funded by the Plants Market Access Council (PMAC), is being upgraded to give exporters and plant produce industry sector groups rapid access to the best available information on trading partner MRLs for pesticides. The upgrade will give immediate access to the information through an on-line query system that can extract the MRL information for a country, a pesticide or a particular crop, or any combination of these.

The Group’s expertise in this area was recognised internationally through New Zealand’s participation in significant FAO and Codex Committee work.

The establishment of the Plant Products Residue Advisory Group (PPRAG) helped ensure a good flow of information from industry to NZFSA’s Food Residues Surveillance Programme. The programme provides baseline data on pesticide residue levels in New Zealand produce.

Wine exports

The development, passing and implementation of the Wine Act (in force from 1 January 2004) was another major highlight for the group. At the heart of the Act is the concept of risk-based Wine Standards Management Plans, which provide a ‘one-stop-shop’ regime for compliance with food safety, composition, labelling and overseas market requirements. It also allows for the creation of wine standards and regulations, and a system for registering exporters.

Following the introduction of the Wine (New Zealand Grape Wine Export Eligibility Requirements) Notice in July 2006, the Group published the New Zealand Grape Wine Export Code. This publication provides detailed supporting information to exporters, auditors and sensory evaluators, and underpins and strengthens the wine export certification service.

The industry has also benefited from the introduction of contestability into laboratory analysis for wine that is exported to markets that require official testing.

In addition, a wine web portal was developed for the electronic certification system for wine. This provides winemakers and exporters with access to up-to-date information on batches of wine, enabling them to monitor eligibility and wine volumes for export. It also allows them to apply online for export certificates.

Ongoing consultation between NZFSA and the wine industry was secured with the establishment of the Wine Sector Council.

Official organic assurance programme

The organic production sector, which earns about $70 million a year through exports, is supported through NZFSA’s Official Organic Assurance Programme, established on 1 July 2002. NZFSA sets standards, approves inspection bodies and inspectors and issues export certificates to the EU. In late 2003, the programme passed its first EU audit – an encouraging vote of confidence in the newly establishing industry and its assurance programme.

The programme also has partial equivalence with the United States and equivalence has now been achieved through the Ministry of Agriculture, Forestry and Fisheries of Japan, facilitating trade between the two countries in organic plant products.

Dairy quota export markets

At the end of its first five years, the Export Standards Group was preparing to manage certification requirements following the loosening of some restrictions on dairy product exports through the Dairy Industry Restructuring Amendment Bill (introduced in August 2007). The Bill amends the Dairy Industry Restructuring Act 2001, and completes the transition away from the monopoly export powers of the former New Zealand Dairy Board.

The new export policy framework provides new opportunities for dairy exporters, and re-allocates export quota rights to markets in Canada, the Dominican Republic, the European Union, Japan and the United States as they become available between 2007 and 2010.

Following some legislative and E-cert system changes, exporters who have proven their eligibility will receive a quota allocation from MAF. NZFSA will provide the required dairy quota certificates.

Industry forums

Partnership with industry and consumers has been extended through a number of existing and new industry forums, including the Dairy Product Safety Advisory Council, Dairy Industry Export Committee, Plants Market Access Council, Seafood Standards Council, Meat Industry Strategic Steering Committee and Wine Sector Council. These forums provide important strategic input to NZFSA’s work.

Export Standards Group – Market Access

Tony Zohrab, Director: Market Access

Market access: plant products

The market access team successes achieved by the Group may not always receive wide publicity outside the food export sector, but nonetheless make important contributions to the industry’s profitability and New Zealand’s economy.

In the horticulture sector, the Group has worked closely with the PMAC. Standards have been developed for the management of agrichemicals and quality grades for fresh plant products. These form the basis of an official assurance programme for fruit and vegetables if required for trade purposes. This is a proactive industry-government initiative in response to increasing interest by overseas authorities in controlling imports of fresh produce.

In principle, New Zealand advocates against the need for prescriptive grade standards to be applied to horticultural produce for non-safety related measures such as size and colour. European acceptance of New Zealand’s case for measurement of apples on a weight basis, and measurement of kiwifruit maturity based on dry matter content, are two examples of incremental but important gains for the industry whereby international regulation is minimised.

In addition, agreement was reached at the United Nations Economic Commission for Europe Standardisation Session for fresh fruit and vegetables on maturity criteria for apples. This will open trade to the European Community for smaller-sized fruit and provide a welcome increase in returns to New Zealand’s pipfruit industry.

Market access: animal products

Many of the market access gains in the animal products area have been routine and highly technical, but the first five years have been punctuated by some important breakthroughs in New Zealand’s trade relations.

One of the most significant developments has been the progress made under the New Zealand/EU Sanitary Agreement. Initially concluded in 1996, this Agreement finally came into force in early 2003.

EU countries together make up the biggest single market for New Zealand’s dairy, meat and seafood products, followed by the United States and Japan.

While the Sanitary Agreement has significant strategic importance, what really matters to New Zealand exporters is the wide-ranging acceptance by the EU of the equivalence of New Zealand.

Technical equivalence successes are often built on years of preparatory work and play a big part in keeping market access open. The benefits from the Sanitary Agreement were amplified in May 2004 with the accession of 10 further states to the EU and two more states in January 2007. The Sanitary Agreement is also becoming a channel for market access agreements with Canada, Switzerland, Norway and Iceland, as these countries each have their own agreements with the EU.

Good progress has also been made under the Sanitary Agreement in the area of contingency planning in the event of a major animal disease outbreak by setting up pre-agreed certification in the event of, say, a major foot and mouth disease (FMD) outbreak in either party. Such an arrangement could help mitigate the devastating effects of an FMD outbreak, were it to occur in New Zealand.

Free Trade Agreement (FTA) SPS chapters have also been an important focus. One of the most significant for NZFSA has been the FTA SPS Chapter negotiations with China, as New Zealand and Chinese officials build a free-trade agreement between the two countries. The New Zealand-China SPS chapter lays out some robust principles. Modelled, principally on the New Zealand/EU Sanitary Agreement, it also incorporates plant products.

This component of a New Zealand-China free trade agreement has the potential to streamline New Zealand’s export trade, and has become a template for other FTA SPS Chapter negotiations, such as the Gulf Cooperation Council (GCC).

The GCC comprises; Kuwait, Saudi Arabia, Oman, United Arab Emirates, Bahrain and Qatar. New Zealand is working proactively with the GCC on developing a robust FTA SPS chapter and has made good progress to date.

Good market access progress was also made with Russia, with bilateral agreement reached covering venison, horse, dairy goat milk and petfood products. This work has opened up markets to New Zealand exporters.

Trade assurances: TSEs

Risks of incursion by the group of diseases known as transmissible spongiform encephalopathies (TSEs) are low, but potential costs of an incursion are high. Efforts intensified during the first five years to reinforce New Zealand’s level of surveillance assurance for bovine spongiform encephalopathy (BSE), and to ensure our systems for excluding this disease remain robust. These efforts were recognised in May 2006 when the world organisation for animal health, the OIE, declared New Zealand to be BSE free – a status shared by only three other countries.

In 2006, MAF and NZFSA worked closely with Britain’s Department of Environment, Food and Rural Affairs (DEFRA) when it investigated a case of atypical scrapie (a type of TSE) in a sheep that had links to New Zealand. Scrapie is not present in New Zealand, and an investigation by the Spongiform Encephalopathy Advisory Council in Britain concluded that New Zealand was extremely unlikely to be the source of the disease.

International achievements

The Export Standards Group played a crucial role on the international stage, not only in market access matters, but also as contributors to international food safety standards through Codex Alimentarius Commission (Codex) and the FAO. These are three examples of wins for New Zealand exporters achieved in the Codex forum:

• sixteen standards for cheese have been adopted by the Codex Committee on Milk and Milk Products, concluding several years of debate on complex issues such as the naming of traditional cheeses and country of origin labelling. The standards are for commonly traded cheeses like cheddar, and mozzarella, and better define a common consistent base for international trade

• agreement was reached by the Codex Committee on Food Labelling on New Zealand’s proposal for inclusion of ethylene, in the Guidelines for the Production, Processing, Labelling, and Marketing of Organically Produced Foods. If the standard is amended, it will support the practice of ripening organic kiwifruit using ethylene after the fruit has been picked, and will enable continued growth in international trade

• the Codex Committee on Meat Hygiene code, under New Zealand’s chairmanship, was substantively revised to reflect a risk-based approach to meat hygiene.