Agricultural Trade Matters, October 2015
Agricultural trade matters provides an overview of what the Department of Agriculture and Water Resources and the Australian Government are doing to support international agricultural trade.
This is a past edition of Agricultural trade news.
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Touch down! Australia secures its fourth trade deal in two years and it’s the biggest ever
Australian farmers are set to gain major new market access for our agricultural products, after the Australian Government agreed a historic new trade agreement on 6 October 2015 with 11 other Asia–Pacific nations, the biggest ever of its kind. For agriculture, the Transpacific Partnership will eliminate tariffs on more than $4.3 billion of Australia’s dutiable exports of agricultural goods. A further $2.1 billion of Australia’s dutiable exports will receive significant preferential access through new quotas and tariff reductions. In 2014, around 33 per cent, or $15 billion, of Australia’s agricultural exports were to TPP countries.
Continue reading about benefits of the TPP to Australian agriculture
Information on the agriculture outcomes in the TPP is set out in the Department of Foreign Affairs and Trade’s (TPP ) goods market access fact sheet. Highlights from the fact sheet include:
- Beef: The TPP will see significant reductions and elimination of tariffs on beef and beef products into Japan, building on the Japan–Australia Economic Partnership Agreement (JAEPA); elimination of tariffs on beef and beef products into Mexico and Canada over 10 years and elimination of the AUSFTA beef safeguard into the US.
- Sugar: For the first time in over 20 years, Australia has been granted guaranteed new access into the US; tariff elimination and levy reduction for high polarity sugar into Japan adding further to the competitive advantage of JAEPA; elimination of the tariff on refined sugar into Canada.
- Rice: For the first time in over 20 years, quota expansion for Australian rice into Japan and agreement to new administrative arrangements to facilitate trade.
- Dairy: Elimination of tariffs on a range of cheeses covering over $100 million in existing trade with Japan, new preferential access for a further estimated $100 million of trade, building substantially on JAEPA and new quota arrangements for Australia on butter/skim milk powder. In the US elimination of tariffs on dairy products including milk powders, ice-cream, infant formula and selected cheeses, increased quota access of 9000 tonnes for Australian cheese exports and improved quota administration arrangements. New preferential access into Mexico and the highly protected Canadian market.
- Cereals: Elimination of tariffs on wheat and barley into Mexico (within 10 years) and Canada (upon entry into force). Reduction of the mark-ups applied to wheat and barley in Japan and the creation of new quota arrangements above and beyond JAEPA.
- Wine: Elimination of tariffs into Mexico (between 3 to 10 years) and Canada (upon entry into force), Peru (within 5 years) and, for the first time, Malaysia (within 15 years) and Vietnam (within 11 years).
- Seafood: Elimination of all tariffs into Canada, Peru and Vietnam on entry into force, and Mexico and Japan within 15 years.
Minister for Agriculture and Water Resources travels to Indonesia
Minister Joyce travelled to Indonesia in October 2015 to meet with his counterparts in the Indonesian Government to talk about progressing agricultural cooperation, investment and trading opportunities between the two countries. Indonesia is Australia’s fourth largest agricultural export market. In 2014, Australia exported $3.3 billion of produce to Indonesia — eight per cent of the total value of Australian agricultural exports. An accompanying delegation from Australia’s live cattle, red meat, sugar, grains and horticulture industries participated in roundtable discussions with Indonesian industry leaders, identifying opportunities for future collaboration and increasing two–way trade.
Australia gets support from the OECD for our agricultural policy settings
The Organisation for Economic Cooperation and Development (OECD) has released two reports which strongly endorse Australia’s agricultural policy settings; the Agricultural Policy Monitoring and Evaluation Report 2015 and the Innovation, Agricultural Productivity and Sustainability in Australia report. An important component of the OECD’s annual Agricultural Policy Monitoring and Evaluation Reports is the Producer Support Estimate (PSE), which shows a country’s levels of trade distorting support to farmers. Australia’s transparency and low levels of trade distorting support to farmers, with a 2014 PSE figure of 2.3 per cent, helps with our market access negotiations.
Continue reading about the OECD’s report on agriculture in Australia
The OECD provides policy makers with independent high–quality analysis that can be drawn upon when considering how to tackle policy problems. This makes the department’s engagement with the OECD a key part of our international work.
The OECD has yet again praised Australia for its low PSE which it has published in the Agricultural Policy Monitoring and Evaluation Report. Australia’s PSE, which shows our levels of production distorting support policies, has been as low as around 2 per cent for a number of years. Our latest PSE figure is 2.3 per cent for 2014.
The Innovation, Agricultural Productivity and Sustainability in Australia report broadly supports Australia’s agricultural policy settings. The report notes that our agriculture and food industries are well placed to contribute to the economy’s future growth, given the robust prospects of global food demand and the continuing high international competitiveness of these sectors. It recommends how policy-makers can improve agricultural innovation and productivity in the future. The report follows Australia’s pilot of the OECD Framework for Analysing Policies to Improve Agricultural Productivity Sustainably (the framework).
The framework, instigated by the G20, is a tool to help governments and policy makers assess their domestic arrangements, policies and settings, share experiences, and review the impact of policies on agricultural innovation and productivity. Brazil, Canada and the Netherlands have also been reviewed and some of Australia’s key trading partners including the United States, China and Turkey are also planning to apply the framework. These reviews will provide useful insights about agricultural policy-settings within the countries that undertake them. The reports will provide a valuable source of evidence for discussions about agricultural and trade policy reform globally.
Improvements to shelf life requirements for Qatar
The department’s Agriculture Counsellor in Dubai and officers in Canberra have worked to gain an increase in the shelf life requirements for vacuum packed sheep and beef meat exports to Qatar. An increase from 70 days to 90 days was achieved in September 2015, giving Australian industries the opportunity to take advantage of economies of scale and benefit from an improvement to their price competitiveness in the market. Advocating for the increase of shelf life requirements across the Middle East and North Africa is a key element of the department’s strategy for the region.
Making exporting easier — a review of Australia’s agriculture export regulation
The department is reviewing its export regulation framework to address areas of potential improvement to better support exporters and facilitate trade. An ongoing challenge for the agricultural exports industry is negotiating new opportunities with countries and meeting evolving importing standards and certification requirements of trading partners. Export regulation helps to meet the challenge, and the department’s export regulation review will assess the current regulatory framework and identify improvements to ensure our regulation supports agricultural exporters to quickly access and use market opportunities now and into the future.
Continue reading about the Export Regulation Review
Agricultural exports are currently regulated by a framework of more than 20 Acts (including the Export Control Act 1982 and the Australian Meat and Live-stock Act 1997) and more than 40 pieces of delegated legislation. The department undertook an extensive stakeholder consultation exercise (which closed on 21 September 2015) and will use input from this process to develop ideas on how the framework could be improved.
The department will provide recommendations to government before the end of 2015. This will include a report for government consideration that summarises stakeholder concerns, issues raised, and the outcomes of the consultation process. Stakeholders and trading partners will be advised of any proposed regulatory or administrative changes to the current agricultural export regulation framework.