The WTO is vital to the Australian Government’s international efforts to push for substantial reductions in trade distorting subsidies, tariffs and non-tariff barriers used by other countries. It also ensures a fair and level playing field for Australia’s agricultural exports. A key objective of the Department of Agriculture, Water and the Environment is to contribute to these efforts and improve export opportunities for Australia’s primary producers.
Agricultural trade is the most distorted of all sectors. It is characterised by significant trade barriers and high levels of domestic support. For example, during 2016-18 the annual value of agricultural assistance was USD 202 billion for farmers in China, USD 86 billion for farmers in the European Union, USD39 billion for farmers in Japan and USD 22 billion for farmers in Korea.
The WTO Agreement on Agriculture — developed as part of the Uruguay Round of multilateral trade negotiations (1986-1994) — was a major milestone for the global trading system. For the first time, international rules were established to address some of the major distortions in agricultural trade. The Agreement on Agriculture, bound all agricultural tariffs and imposed disciplines on domestic support measures (such as production subsidies) and export subsidies.
While the Uruguay Round outcomes on agriculture were an important first step, more far-reaching trade liberalisation is needed. In November 2001 WTO members commenced the Doha Round of trade negotiations to continue the reform process and build on the commitments made in the Uruguay Round.
These rules help international trade flow as smoothly, predictably and freely as possible. WTO rules can provide secure trading conditions and reduce some of the risks associated with doing business overseas. Australia, like all other members, is required to abide by these rules.
Agricultural trade is the most distorted sector in the world. It is characterised by very high trade barriers, high levels of domestic support and export subsidies. For example, in 2010 government support payments accounted for an average of 20 per cent of the gross income of farmers in the European Union, 7 per cent for farmers in the United States and 50 per cent for farmers in Japan and 45 per cent for farmers in the Republic of Korea.
The WTO Agreement on Agriculture — developed as part of the Uruguay Round of multilateral trade negotiations (1986-1994) — was a major milestone for the global trading system. For the first time, international rules were established to address some of the major distortions in agricultural trade. The Agreement on Agriculture eliminated import quotas, bound all agricultural tariffs and imposed disciplines on domestic support measures (such as production subsidies) and export subsidies.
While the Uruguay Round outcomes on agriculture were an important first step, more far-reaching trade liberalisation is needed. In November 2001 WTO members commenced the Doha Round of trade negotiations to continue the reform process and build on the commitments made in the Uruguay Round.
A paper by ABARES outlines opportunities for Australian farmers under global trade liberalisation (published in Australian Commodities March Quarter 07.1).
The Doha Round of trade negotiations provides an opportunity to:
- strengthen existing WTO rules
- impose new and more rigorous disciplines on the policies and programs of other countries
- substantially reduce subsidised agricultural production, and
- deliver improved market access for exporters by cutting tariffs.
Australia and its Cairns Group partners are committed to achieving an ambitious outcome from the Doha Round in the form of an open and fair international market for agricultural goods.
The Cairns Group is a coalition of 19 agricultural exporting countries bringing together developed and developing countries from Latin America, Africa and the Asia-Pacific region. The Cairns Group has been an influential voice in the agricultural reform debate since its formation in 1986 and continues to play a key role in facilitating efforts to progress WTO negotiations in the Doha Round.
In a report entitled ‘The Cairns Group: Catalyst for agricultural trade reform’, the prospects for increased Cairns Group trade are analysed to highlight the benefits of more market oriented multilateral agricultural trade reform.
Information about the state of play in the Doha Round negotiations is available from the Department of Foreign Affairs and Trade (DFAT) website.
The department contributes to international negotiations to improve market access for Australian agricultural commodities and improve the sustainability of global trade through the WTO Doha Round of negotiations and the WTO’s various committees.
The department's aim is to ensure that these negotiations address portfolio interests and maximise opportunities to improve the international competitiveness of Australia's agricultural, food, fisheries and forest industries. The department works closely with DFAT to develop Australian negotiating positions on:
- agriculture
- non-agricultural market access (including fisheries and forestry)
- rules negotiations (including anti-dumping and subsidies)
- trade and sustainability
- trade facilitation and
- geographical indications.
The department also plays a key role in the following WTO committees:
- Committee on Agriculture
- Committee on Technical Barriers to Trade
- Committee on Sanitary and Phytosanitary Measures.
The department’s aim is to ensure that these committees take Australian interests into account and, where appropriate, use them to address trade barriers and other trade problems with other WTO members.
The department monitors the impact of developments in the WTO (for example, in trade disputes) on Australia’s agricultural industries and environmental policies and advises ministers and other government agencies.
It also provides advice to domestic industry on these issues and takes a role in ensuring that Australia meets its obligations in areas directly related to the department's portfolio.
The WTO Committee on Agriculture oversees the implementation of the Agreement on Agriculture. It normally meets four times a year and is an important tool for Australia to ensure other WTO members are complying with their obligations on subsidies, market access and other topics.
In conjunction with the WTO Trade Policy Review Mechanism, the Committee on Agriculture helps to promote transparency in the global trading system and allows countries to scrutinise the trade policies and rural programs of their trading partners.
The WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) covers food safety and animal and plant health regulations such as biosecurity and quarantine.
The SPS Agreement recognises the right of WTO members to enforce animal and plant health measures provided they are scientifically justifiable and take into account international standards.
The measures should also be applied only to the extent necessary to protect human, animal or plant life, health or safety.
The SPS Agreement established the Committee on Sanitary and Phytosanitary Measures, in which the department plays a key role, both in questioning the biosecurity measures of Australia’s trading partners and in defending Australia’s biosecurity and quarantine arrangements.
WTO rules apply equally to all members and are backed by an effective dispute settlement process.
Where a government’ support to industry is inconsistent with their obligations as a member of the WTO, or they are not complying with the rules in some other way, other countries have the right to challenge such actions through the WTO dispute settlement system. All members are also subject to the same dispute processes.
The department plays a key role, in conjunction with other Australian Government agencies, in relevant disputes involving agricultural, food, fisheries or forest products.
More information about the dispute settlement system is available from the WTO website. Information regarding Australia’s involvement in WTO disputes is also available from the DFAT website.
The WTO Trade Policy Review Mechanism ensures the surveillance of national trade policies. It provides Members with an opportunity to ask relevant questions or seek further information on any aspect of another Member’s trade, investment or economic policy, as well as specific issues relevant to bilateral commercial relations. The majority of countries, including Australia, are reviewed every six years.
The department questions trading partners on policies which are commercially or environmentally detrimental and assists the WTO to conduct is review of Australia’s policies. The eighth review of Australia’s policies occurred in 2020.
The National Farmers’ Federation (NFF) maintains and coordinates a committee of agricultural trade representatives which liaises closely with the government on issues relating to trade. The department, in conjunction with DFAT, works closely with this committee to inform the government’s position in both multilateral trade negotiations and various bilateral negotiations.