Two New Zealand horticulture industry leaders have taken aim at an expansion of a freight equalization scheme for Tasmanian products, claiming Australia is in breach of its World Trade Organization (WTO) obligations.

In an article published by Horticulture New Zealand (HortNZ) publication The Orchardist, Horticulture Export Authority (HEA) CEO Simon Hegarty and Onionz NZ chief executive Mick Ahern highlighted the Tasmanian Freight Equalisation Scheme (TFES) was introduced in 1976 to assist the movement of goods to the Australian mainland.

"In March 2015, then Prime Minister Tony Abbott announced a A$203 million expansion of the scheme to include product destined for export markets (i.e outside Australia)," Hegarty and Ahern said.

"Since the start of the expanded scheme on January 1, 2016, Tasmanian exporters have been cashing in on a A$700/Twenty-foot equivalent unit container subsidy for product destined for export markets.

The executives said export subsidies were illegal in the eyes of the WTO, defined as "subsidies contingent on export performance".

"Australia has expanded a domestic support policy to now include export product and thumbed its nose at international trade law to suit its own domestic agenda," Hegarty and Ahern said.

"Since January 1, 2016, exporters from New Zealand and other countries are being unfairly disadvantaged in the various export markets to which the Tasmanian products are being exported.

"Thanks to the subsidy, Tasmanian exporters are undercutting other exporting nations for a range of products into a range of markets."

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