Program 1.13: International market access
The objectives of this program are to maintain and improve international market access opportunities for Australia's food, fisheries and forestry industries.
Review of performance
This review addresses the deliverables identified in the 2011–12 Portfolio Budget Statements. Table 15 and Table 16 summarise the extent to which we achieved deliverables and met key performance indicators with a specific target.
Advancing Australia's agricultural trade interests
Australia exports more than half of its agricultural production by value, making international trade and market access vital to the profitability of most portfolio industries and a key part of DAFF's function. During 2011–12, we participated in multilateral and bilateral trade negotiations and international standards committees to advance the interests of portfolio industries. We also continued our efforts to maintain and build market access by:
- removing international trade barriers and reducing trade distortions
- monitoring developments in trade policy
- addressing market access issues with our trading partners.
Removing international trade and production distortions
Working with the World Trade Organization
We worked with the Department of Foreign Affairs and Trade (DFAT) to develop new strategies and workable options for making progress in the World Trade Organization (WTO) Doha Round of multilateral trade negotiations. Australia is seeking to achieve improved market opportunities for Australian agricultural producers through the Doha Round. This will be achieved through:
- tighter disciplines on trade and production-distorting agricultural subsidies, export credit and food aid
- the elimination of export subsidies
- reduced tariffs
- increased quotas.
As well as work on the Doha Round, we participated in meetings of the WTO Committee on Agriculture. The committee provides an opportunity to seek information from other members on their agricultural programs and policies, which provides increased transparency and enables the department to monitor other countries' compliance with their WTO commitments. As part of this process, we prepared Australia's annual domestic support notification to the WTO and contributed to a number of other notifications on Australia's policies and measures relating to agriculture.
Negotiating new bilateral and regional free trade agreements
Bilateral and regional free trade agreements (FTAs) play a key role in achieving Australia's trade liberalisation objectives. DAFFs role is to provide expertise on portfolio issues to support the lead negotiators from DFAT.
In 2011–12, we actively engaged in FTA negotiations with Malaysia, Japan, China, the Republic of Korea and India. Our primary goal in all of the agreements is to improve market access by reducing tariffs, increasing quotas and reducing domestic support.
We also worked on regional FTAs, including the Trans-Pacific Partnership (TPP) and the Pacific Agreement on Closer Economic Relations (PACER) Plus negotiations.
We continue to participate in the TPP negotiations between Australia, Brunei Darussalam, Chile, New Zealand, Singapore, the United States (US), Peru, Vietnam and Malaysia. Mexico and Canada will join the negotiations in the future. Australia is seeking a highly ambitious agreement that will eliminate all tariffs, address other impediments to trade in agricultural products, and support sanitary and phytosanitary (SPS) arrangements. Key portfolio interests included in the agreement are market access, rules of origin, SPS and environmental elements such as fisheries and forestry matters.
The PACER Plus agreement is intended to be unique, with trade capacity building and trade development assistance to strengthen Pacific island countries' ability to trade. The fourth meeting of PACER Plus officials was held in Brisbane in March 2012. The meeting provided an opportunity to progress negotiations and further consider common priority issues agreed by trade ministers, with a particular focus on rules of origin, customs procedures and labour mobility, including related development assistance issues.
Existing free trade agreements
Our existing FTAs provide continuing opportunities to review and improve market access conditions for Australia's agricultural, fisheries and forestry exports. Consultative groups set up under the FTAs provide the opportunities for these negotiations.
The agriculture and SPS committees established under the Australia–United States Free Trade Agreement held their annual meetings in Canberra in March 2012. Discussions included agricultural trade performance and policy matters, the future operation of the Standing Technical Working group and market access issues of interest to each side.
Freeing up trade
The signing of the Malaysia–Australia Free Trade Agreement (MAFTA) in May 2012 has cemented stronger trade and commercial ties and improved market access for a range of Australian agricultural products.
Negotiations began in 2005 and the department worked closely with the lead agency, the Department of Foreign Affairs and Trade, to ensure the interests of agricultural industries were clearly articulated and represented. Under the new agreement, there will be increased quotas of liquid milk for Australian dairy exporters and these will be subject to zero tariffs, compared to 20 per cent for exports over and above the quotas. Malaysia also agreed to liberalise significantly the licensing arrangement for exports of liquid milk, including higher value retail milk products.
From 2023, Australian rice exporters will also benefit from the agreement with open access arrangements and reduced tariffs. All rice tariffs will be eliminated by 2026. MAFTA also provides for the immediate elimination of tariffs on most fruits, with a phased removal of tariffs for tropical fruit (such as melons, pineapples and mangoes) by 2016. The agreement has also secured a commitment from Malaysia to pass on to Australian wine exporters any reduction or elimination of tariffs that Malaysia provides to other countries' wine imports.
Malaysia is Australia's tenth largest trading partner and is an important market for the agriculture, fisheries and forestry sector, with agricultural exports to Malaysia valued at $874.4 million in 2010–11 and imports valued at $770 million. MAFTA builds upon the good outcomes achieved in the ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA) signed in 2009.
MAFTA—a stronger trade relationship between Malaysia and Australia
Expert and working groups under the Thailand–Australia Free Trade Agreement (TAFTA) met in Brisbane in May 2012. The SPS expert group progressed DAFF's interest in improved market access conditions for Australian pork, live horse and horticultural exports and in improved access for Thai duck and chicken meat, prawns and mangoes into Australia. The TAFTA joint working group held discussions on food security, Australia's live animal export arrangements and the impacts of flooding and future flood management measures for agriculture in both countries.
The joint committee under the ASEAN–Australia–New Zealand Free Trade Agreement met in Brunei in May 2012. We participated in meetings of the Committee on Trade in Goods, the Sub-Committee on Rules of Origin and the Sub-Committee on SPS Matters. Among other things, the department provided a progress report on the regional diagnostics network funded under the agreement's Economic Cooperation component.
Improving market access
We continued to negotiate the removal of technical trade barriers with other countries. These barriers, which often relate to measures such as labelling, pest and disease requirements and residue limits, are sometimes inconsistent with Australia's production systems and, in many cases, are also inconsistent with international standards. Occasionally, these measures contravene a country's obligations under international trade rules.
The department seeks to gain recognition that Australia's production systems achieve equivalent outcomes for each trading partners' requirements. We also seek to ensure consistency with international standards and WTO members' rights and obligations.
The department deals with market maintenance and access issues on a daily basis. Many of these are resolved relatively easily, through the provision of additional information or advice to a trading partner. Some issues take longer to resolve, requiring information that takes time to compile, additional research or verification of Australian facilities or systems through audits or inspections, as well as numerous representations at a government-to-government level. The department works through all available channels, including the WTO SPS committee, to secure favourable outcomes.
We continued to work closely with portfolio industries and overseas governments to support existing trade for a range of commodities and to achieve access to new markets. During 2011–12, we successfully addressed at least 12 market access constraints through negotiations with 14 countries and the European Union (EU) to gain, restore, or improve market access for 15 commodities.
Some of our achievements include:
- wool—we maintained market access for wool to the United Kingdom, United States and European Union by addressing retailer concerns over mulesing
- chilled meat—we maintained market access to China under revised protocols, following uncertainty about the eligibility for Australian chilled meat exports at some Chinese ports
- fresh fruit and seed—we maintained access for 23 fresh fruit and seed commodities to Vietnam, following changes to their quarantine regulations and food safety controls
- sorghum seed—we achieved access to Peru after several years of negotiations
- Australian honey—we achieved access to Egypt, following successful negotiation of health certification conditions
- citrus—we achieved access to India for treatments under more favourable temperatures and more flexible conditions, while negotiations for other commodities continue
- Japanese plums—we achieved access to Taiwan, following negotiations for an under revised treatment schedule, as well as access for Australian carrots requiring a pest-free place of production
- beef—we maintained access for high-quality grain-fed beef to the European Union, following a review by the EU administration of its annual import quota, which will be increased from 20 000 tonnes to 48 200 tonnes from 1 August 2012.
Indonesia made some revisions to its imported plant products regulations, including significant limitations to the ports through which horticultural imports can enter Indonesia. These revisions had the potential to significantly impact Australia's horticultural exports to Indonesia. We worked with DFAT to make representations to the Indonesian government on this important issue.
We also successfully resumed trade for horses, dogs, cats, cattle, goats and sheep to Malaysia following a number of Hendra virus incidents, finalising agreed protocols in September 2011.
Supporting scientific risk-based biosecurity policies
Sanitary and phytosanitary standards
Under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, members are required to notify the WTO of new or revised SPS measures they intend to introduce, to allow other countries to comment if measures go beyond international standards and could impact on trade. DAFF is Australia's SPS contact point.
We distributed more than 1082 SPS notifications from trading partners to government and industry, and made specific comments on more than 40. Australia also lodged more than 40 notifications of new or revised SPS measures with the WTO. Australia has a proud reputation for implementing measures that are supported by science and rarely experiences adverse reactions from trading partners. We received nine sets of comments on our notifications and successfully resolved all issues.
Comments from Australia to the WTO:
- resulted in the clarification of Thailand's position on testing for genetically modified organisms in relation to a specific gene from 'Starlink' maize
- reinforced to China the need to minimise trade disruptions while gradually implementing proposed regulations for overseas productive enterprises of imported food.
Australia has used the SPS committee to reiterate its support for the international standard setting bodies. Our aim is to affirm the need for all SPS measures to be scientifically justified. Together with a number of like-minded members, Australia has actively participated in discussions on the procedures for ad hoc consultations and the role of private standards. However, progress has been slow. Australia will continue to seek agreement across member countries, while ensuring favourable outcomes for our portfolio industries.
As well as working in multilateral organisations towards standards that support trade for Australian products, we also worked with trading partners to resolve bilateral SPS issues. These included discussions on:
- access restrictions for horticultural and animal products in Indonesia
- an ongoing offal ban in Vietnam
- access for honey to New Zealand
- restoration of access for various meat products to India and Turkey.
We also provided advice on proposed measures for ruminant genetic material imports from the European Union, following an outbreak of Schmallenberg virus in ruminants in Europe.
Codex Alimentarius Commission
Australia continues to play a strong leadership role in the development of international science-based food standards through the Codex Alimentarius Commission. Australia provides input to Codex committees dealing with:
- inspection and certification
- food additives and contaminants
- residues of veterinary drugs and pesticides
- food hygiene
- food labelling
- food nutrition
- food for special dietary uses
- various commodities (fish and fishery products, fruits and vegetables and fats and oils).
Australia provided significant input to standards that were adopted at the commission's 34th session in July 2011, including:
- guidelines for risk analysis of foodborne antimicrobial resistance
- guidelines for the control of campylobacter and salmonella spp in chicken meat
- a compilation of Codex texts relevant to labelling of foods derived from modern biotechnology.
Australia continues to chair the working groups for the establishment of priorities in both the Committee on Pesticide Residues and the Committee on Residues of Veterinary Drugs in Foods. Leadership of these working groups supports the development of maximum residue limits for newer, safer chemicals that can be supported by dossiers provided by industry. This ensures positive outcomes for Australian agriculture.
Through its role as chair of the Committee on Food Import and Export Inspection and Certification Systems, the department is taking a leadership role in the development of standards that harmonise and facilitate trade in food and food products. The next committee session will be held in February 2013 and will continue to progress proposed draft principles and guidelines for national food control systems. Australia will co-host the meeting with Thailand. The purpose of the guidelines is to assist governments in developing systems that contribute to the protection of the health of their populations and meet international obligations. The committee will also discuss possible new work in areas related to monitoring regulatory performance, the burden of multiple questionnaires directed at exporting countries and the need for additional international guidance on managing food safety emergency situations.
In 2011–2012, Australia participated in 14 Codex committees and several working groups to ensure that Codex continues to deliver improved outcomes for domestic food safety and public health policies. This participation rate also ensures enhanced opportunities for Australian agricultural and food industries, while maintaining Australia's position as an internationally competitive food exporter.
Australia contributed $150 000 to support the Joint Expert Meeting on Pesticide Residues (JMPR), which provides independent scientific advice to the Codex and its Committee on Pesticide Residues. This contribution allowed JMPR to meet the increasing demand for the evaluation of chemical compounds. Evaluations are provided to the committee to support the setting of Codex maximum residue limits (MRLs). Australia's trading partners rely on MRLs as part of their import requirements and they are often used as a basis for international trade.
Building international partnerships
We supported a trade delegation to China, Japan and the Republic of Korea to strengthen our agricultural relationship with these countries, which collectively constitute 35 per cent of Australia's agricultural exports. The minister signed key agreements, including protocols with China to allow easier export of Australian wheat, barley and animal genetic materials. An Australian industry delegation accompanied the minister, allowing representatives greater exposure to contacts in these markets.
We provided technical submissions and also met Chinese and Russian officials on a number of occasions to establish the conditions necessary for the commencement of the trade in kangaroo meat products to China and the resumption of the trade to Russia.
A focus in the Middle East was on supporting the implementation of the new regulatory framework for livestock exports (see Program 1.10). An Australian delegation visited the Middle East ahead of the introduction of the new regulatory framework. Trade to the Middle East is continuing and supply chains under the new framework have been successfully established.
We are working with the livestock industry to progress implementation in tranche 2 countries (Israel, Japan, Jordan, Malaysia, Oman, the Philippines, Saudi Arabia, Singapore, United Arab Emirates) and tranche 3 countries to ensure the necessary supply chain assurances are in place by the end of 2012. This work includes representations, briefing of embassies and meetings with governments of importing countries.
In February 2012, India's Minister of Agriculture, Mr Sharad Pawar, visited Australia under a Guest of Government invitation and held a meeting with the minister. Indian officials also met officers from DAFF and other government agencies. The ministers signed a memorandum of understanding to establish a joint working group on cooperation in agriculture. This group will promote dialogue, information exchange and cooperation on agriculture, food, livestock, fisheries and related areas.
Australia places high importance on its agricultural trade relationship with Indonesia. Indonesia is a key market for Australian agricultural exports (valued at $2.6 billion in 2010–11), particularly for wheat, live cattle, meat, horticulture and dairy products. Australia worked to strengthen the relationship through a range of high level meetings, including a visit by the minister to Indonesia in March 2012. The latter meeting addressed a range of issues, including import restrictions for horticultural products, implementation of the new regulatory framework for live cattle exports and assistance from Australia to improve animal welfare in Indonesia.
Forums for progressing agricultural trade and market access issues
We use a range of multilateral forums including the Food and Agriculture Organization of the United Nations (FAO), the Organisation for Economic Co-operation and Development (OECD) and the WTO to work towards outcomes that afford agricultural trade policy benefits for Australia's portfolio industries. The WTO SPS committee enables Australia to address issues that affect market access for agriculture, fisheries and forestry products. Our participation in the Asia–Pacific Economic Cooperation forum provides opportunities to discuss agricultural trade issues at a regional level. The department represents Australia at G20 discussions on agriculture and food security.
We also have in place a number of working groups with key trading partners that enable consultations on agricultural trade policy developments and market access issues. During the year, meetings were held with Indonesia, Malaysia, the European Commission, Russia, Taiwan, Thailand, the United States and New Zealand. We held bilateral consultations on animal and plant health with China, Japan and the Republic of Korea and talks on beef and dairy with Japan. In addition, senior officials held talks with governments of a range of countries, to make progress on market access issues.
Building cooperation and providing technical assistance
We continued to deliver targeted technical assistance, cooperation and capacity building projects to Australia's agricultural trading partners. This assisted in opening commercial opportunities in overseas markets, complementing free trade agreement advocacy efforts and supporting requests for improved market access.
We continued our cooperation with China, supporting a report that examined Chinese food consumption trends and the drivers of demand. This reported on Chinese demand for agricultural products such as red meat, dairy products, grains and sugar, of which Australia is a significant exporter. The report, compiled by a team of Australia- and China-based academics, has increased awareness of how our exports can help meet the demands of the growing Chinese market.
Under the Australia–China Agriculture Cooperation Agreement, we facilitated:
- Australian missions to China relating to B74 mangoes and oaten hay production
- Chinese missions to Australia to study sugar cane production and animal forage management techniques.
As part of Australia's commitment to the WTO Doha Round of multilateral trade negotiations, we developed and funded a project to improve cotton production systems in Africa. CSIRO undertook this project on DAFF's behalf. As part of the project, a delegation from Africa visited Australia in March 2012 to receive training in on-farm techniques, implementing research outcomes, and best practice approaches to cotton production. The delegation visiting Australia was accompanied by the Burkina Faso Minister for Scientific Research and Innovation, Professor Gnissa Konate. As part of this visit the department held briefing sessions outlining Australia's policies on agricultural productivity, rural research and development and sustainable resource management.
We provided technical assistance to Thailand through the Thailand–Australia Joint Working Group on agriculture. The department sponsored a project to inform Thai officials about the Landcare experience in soil management, with a view to incorporating community participation activities into the rehabilitation of soils in Thailand.
We also delivered a range of capacity building activities in Indonesia, Timor–Leste, Papua New Guinea and the Solomon Islands, aimed at providing early warning of emerging pests and diseases in our region and contributing to managing this risk (see Program 2.2).
Influencing the global agenda on agriculture, fisheries and forestry
We continued to represent the interests of our portfolio industries through strong engagement in other multilateral forums and agreements, including the FAO, G20, OECD and the International Treaty on Plant Genetic Resources for Food and Agriculture.
We maintained a constructive dialogue with the OECD, participating in the relevant committee meetings within its Trade and Agriculture Directorate. We worked closely with the OECD during preparations for flagship publications such as the annual Monitoring and evaluation and FAO–OECD outlook report. The department has also been closely involved in discussions on the OECD 2013–14 Programme of Work and Budget.
The department progressed the G20's 2011 initiatives. This included shaping the Agricultural Market Information System, to increase transparency and data sharing for global agriculture markets, and sharing Australian expertise on earth observation and crop forecasting in the GEO Global Agricultural Monitoring Initiative.
The department hosted a joint seminar with France on 'Re-energising Global Agricultural Productivity' in October 2011 in Brussels. Speakers included representatives from the World Bank, FAO, International Food Policy Research Institute, ABARES and the Australia Centre for International Agricultural Research.
We represented Australia at G20 Agricultural Deputies meetings in April and May 2012. At these meetings, we successfully pursued recognition for the important role of agricultural research and development in improving agricultural productivity.
In 2011–12, the department participated in seven different governance and technical committees and subcommittees of the FAO and, in conjunction with New Zealand, represented the Southwest Pacific region. In particular, we participated in meetings of the FAO Council, the key executive body of the FAO that shapes the strategic directions of the organisation. The department also participated in FAO Programme Committee and Finance Committee discussions, addressing the organisation's financial and budgetary planning. The 31st Asia and the Pacific Regional Conference agreed to the decentralisation of some authorities and responsibilities to FAO regional offices—a key initiative of the reform agenda. We engaged in these committees to focus the FAO on provision of global public goods that facilitate and enhance market access and continuing reform.
In March 2012, we hosted a visit to Australia by the Secretary of the International Treaty on Plant Genetic Resources for Food and Agriculture, Dr Shakeel Bhatti. The visit was hosted in conjunction with the Grains Research and Development Corporation and the Crawford Fund. It raised awareness among Australia's plant breeders, researchers, and government and industry stakeholders about the treaty's benefits for sustainable agriculture and food security.
We continue to maintain Australia's membership of international organisations, assisting to advance Australia's international portfolio interests relating to animal, plant and food products and environmental health and sustainability. We have ongoing engagements with international organisations, including the:
- International Organisation of Vine and Wine (see Program 1.5)
- International Grains Council (see Program 1.7)
- International Cotton Advisory Committee
- International Sugar Organisation
- international fisheries organisations (see Program 1.4)
The department's overseas network is integral to pursuing Australia's market access priorities and international policy interests. The specialist agricultural and technical knowledge of our posted officers enables Australia to more effectively engage on its priorities with key trading partners and international organisations.
Our 12 Australian-based officers and 23 locally engaged staff in the United States, Europe, the Middle East and Asia continued to play a major part in Australia's efforts to remove or lower market access barriers, facilitate trade, resolve quarantine issues and respond to strategic issues such as international food security.
One example of these efforts is work through posts in Jakarta and the Middle East to implement the new regulatory framework for livestock exports.
Deliverables and key performance indicators
|Agriculture advancing Australia—international agricultural cooperation Deliver capacity building/cooperation projects in trading partners' countries under priority areas||10–15 projects||Met|
|Performance: DAFF completed 26 capacity building and cooperation projects in trading partners' countries on time and budget.|
|Payments to international organisations Maintain effective distribution of membership funds to international organisations||100% of funds distributed||Met|
|Performance: DAFF paid all annual membership funds to the international organisations of which it is a member.|
|Live Trade Animal Welfare Partnership Fully allocate funds to deliver capacity building and technical assistance projects to improve animal welfare in the Middle East and Southeast Asian countries through the Live Trade Animal Welfare Partnership Program||100% of funds allocated||Met|
|Performance: Weallocated $29 000 under the Live Trade Animal Welfare Partnership (LTAWP) during 2011–12. We used the remaining funds under LTAWP to fund new animal welfare programs (see the Portfolio Additional Estimates Statements 2011–12, page 34).|
|Overseas network Maintain a network of DAFF officers overseas||13 posts
18 key overseas markets
|Performance: DAFF has continued to maintain its 13 posts to facilitate trade by maintaining existing market access and has pursued technical improvements and new market access in18 key market areas.|
|Key performance indicator||2011–12 target||Achievement|
|Minister/parliamentary secretary and executive satisfied with the quality and timeliness of policy advice and support||High level of satisfaction achieved||Met||–||–|
|Performance: DAFF provided policy advice and support to the minister and parliamentary secretary. This advice has been received with a high level of satisfaction. This is a new indicator.|
Outlook for 2012–13
Our international priorities are to create, maintain and build market access by removing international trade impediments and reducing trade distortions.
Of significance in 2012–13 will be the implementation of the new regulatory framework for livestock exports in all remaining markets and, more broadly, the improvement of animal welfare outcomes associated with trade in live animals.
We will focus on communicating about Australia's proposed new biosecurity legislation to both domestic and international stakeholders. We will work closely with our trading partners to resolve any issues prior to the implementation of the new arrangements.
We will continue to pursue market access and the removal of barriers to trade for our agricultural exporters. This will include seeking improvements to our current arrangements for technical market access by negotiating science-based, commercially viable conditions for the export of Australian agricultural products. The department will actively engage trading partners on a bilateral basis, as well as using the WTO SPS Committee to progress long-standing issues in the trade of our agricultural products.
Australia's overseas agricultural interests in the 'Asian Century' are evolving and strategically significant. In 2012–13, we will continue to work to obtain better market access for Australian agricultural commodities and foods in Asian countries. The National Food Plan and the government's Asian Century white paper will provide a focus for these efforts.
The department will continue to influence the global agenda on agriculture, fisheries and forestry by maintaining its engagement in international forums. We will continue to support the government's efforts to progress the Doha Round of multilateral trade negotiations. The department will also pursue Australia's agricultural trade interests through the WTO Committee on Agriculture.
We will continue to support the Department of the Prime Minister and Cabinet in whole-of-government engagement on the G20, providing advice and expertise on food security, sustainable agricultural productivity and FAO reform. The 38th FAO Conference will be held in Rome in June 2013. This will provide and opportunity to press for the completion of FAO reforms under the leadership of the new director-general.
We will continue to engage the OECD, to maintain the rigour of OECD analysis of member and non-member agriculture policies and its work with the FAO on the medium-term outlook for agricultural commodity production and prices. We will also pursue new analyses on trade facilitation at the border and on the constraints and opportunities of the transfer and adoption of technology.
Concluding FTA negotiations and promoting trade liberalisation are important goals for Australia. The department will continue to participate in bilateral and regional FTA negotiations, in line with the government's priorities.