Abbott signed a free trade agreement with South Korea, concluded an FTA with Japan and led a large trade delegation to China for an inaugural ‘Australia week’ in China. But gains for dairy, pork, rice and grain sectors in the Japan FTA are limited.
Back in Canberra last week, Abbott said more trade is part of the Government’s plan for a strong and prosperous economy.
“More trade means more jobs and when trade barriers fall, prices fall with them; that’s good news for families. This trade mission has been a success and a testimony to what we can do as a nation.”
But Australian farmers say the proposed FTA with Japan falls short of expectation. (Japan is Australian dairy’s biggest market: A$511 million in 2012-13.) The Australian Dairy Industry Council says the FTA confers savings of only A$4.7 million in its first year, rising to about A$11.6 million by 2031. This is out of A$511 million exports – just 0.1% per litre after 20 years.
ADIC deputy chair Robert Poole says the agreement fell well short of the industry’s expectations, minimal progress having been achieved in reducing trade barriers.
“We are extremely disappointed with the deal announced by the prime minister,” Poole says. “We were hopeful Government had heeded the industry’s message on freeing up market access in Japan, however it now appears our words fell on deaf ears.”
There has been no movement in this agreement on fresh cheese, the number one objective for Australian dairy, with tariffs to remain at 29.8%.
Poole says success on this would have saved about A$60 million in tariffs. “Instead we have received nothing and the tariff stays in place.”
Ricegrowers’ Association of Australia Inc (RGA) president Les Gordon says the exclusion of rice from the Japanese FTA is extremely disappointing.
“Australian rice growers are recognised as the most efficient in the world. This announcement punishes [us] by preventing expansion into this important market for our high quality specialty rices and value-added rice food products.”
National Farmers Federation Brent Finlay says he understands the difficulties involved in negotiating such an agreement but is disappointed.
“We recognise the historical significance of the agreement. However, we are disappointed with the overall outcomes for agriculture with a number of sectors facing marginal improvements or limited commercial gains,” Finlay says.
The agreement appears to be positive for Australian beef, horticulture and seafood, with some tariffs falling over time.
But the ultimate objective of any trade agreement is to obtain tangible benefits to farmers, he says.
“Agreements must be comprehensive. That means, no sector carve-outs and elimination of tariffs. The Japanese agreement falls short.
“The agreement does not improve—or marginally improves—market access and terms of trade for dairy, sugar, grains, pork and rice.”
