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NZ, Russia agree to begin free trade accord talks

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Fonterra wants more market share

Bloomberg | 1 June 2010

NZ, Russia agree to begin free trade accord talks

By Tracy Withers

June 1 (Bloomberg) — New Zealand, the world’s biggest dairy exporter, agreed to begin work on a free trade accord with Russia, the world’s largest market for butter and cheese.

Russia, the world’s fifth-largest food importer, will begin formal negotiations once studies are completed in coming months, Trade Minister Tim Groser said today in an e-mailed statement. Any deal would include Belarus and Kazakhstan, which are customs union partners of Russia, Groser said after meeting yesterday in Moscow with Russian Economy Minister Elvira Nabiullina.

Removing tariffs would boost sales for New Zealand-based Fonterra Cooperative Group Ltd., which last year supplied 50 percent of Russia’s internationally imported butter.

“Russia has the potential to become an even more important market for the dairy industry and Fonterra,” Kelvin Wickham, managing director, global trade, said in an e-mailed statement.

New Zealand’s exports to Russia were worth NZ$187 million ($127 million) last year, of which about two-thirds were dairy products. That’s a fraction of the more than the $30 billion of food Russia purchases annually.

New Zealand has established free trade relationships with nations including China, Thailand, Singapore and Chile to bolster exports, which make up 30 percent of the economy. It is also in talks with South Korea, India and the Gulf Cooperation Council.

 source: Bloomberg