Strong wool eyes China
China looks set to play a key role in helping the New Zealand wool sector shift away from trading as a commodity supplier.
The National Farmers Federation says the FTA announced last month cements Australian agriculture’s place in the world’s biggest market. President Brent Finlay says the deal recognises agriculture as one of the nation’s economic pillars, generating millions of export dollars.
But not all farmers are celebrating; though dairy, red meat and growers have won large-scale tariff reductions, sugarcane and grain growers are crying foul.
Canegrowers Australia chairman Paul Schembri says the exclusion of sugar in what looks like a trade-off is an unacceptable outcome – “a lost opportunity for our industry and for China’s sugar importers”. “Yes, sugar is traditionally difficult in trade negotiations, but there was no good reason for this to occur.”
China is keen to protect its sugarcane farmers, who strongly oppose imports.
Among Australian grain growers there are mixed feelings about the FTA. GrainGrowers Australia says it makes good gains for some Australian grains but not all.
Australia’s premier grain industry, wheat, remains subject to an out-of-quota tariff of 65%, and within-quota tariff of 1%. Exports of Canola will remain under a tariff of 9%, and maize exports are excluded from concessions under the deal. “Wheat and canola continue… to be non-negotiable for China,” says Cheryl Kalisch Gordon, manager trade and market access, GrainGrowers.
The NFF says the FTA must provide for better outcomes for sugar, rice, cotton and some grains. “These products will be in high demand in China over coming years and must be included in the review arrangements after three years,” says Finlay.
But he acknowledges the FTA is an outstanding achievement which, “based on our own growth and the New Zealand experience could conceivably [triple our] agricultural exports to China within the decade”. “The landmark agreement will see the elimination of tariffs on Australian lamb, beef, horticulture and dairy products to China.” says Finlay.
China is already a major trading partner: Australian farm exports doubled 2009-2013 to at least $7 billion.
Big winners
- Tariffs on dairy products such as cheese, milk powder and butter will reduce to zero, saving millions of dollars.
- Tariffs on such as strawberries, potatoes, cut flowers and other produce will be reduced to zero over five years.
- Lamb and beef tariffs will be cut across the board, including skins and hides.
