Fight for new deals or farm exports will be lost

Billions at stake for Australia as more aggressive regimes strike better trade deals with Asia.

National Farmers' Federation CEO Tony Mahar. Picture: AAP

Australia risks losing multi-­billion-dollar exports through government “complacency” as more aggressive regimes — ­including the Trump adminis­tration — strike better trade deals with Asia, the peak farmers group has warned.

National Farmers Federation chief executive Tony Mahar, who is on an Asian trade mission with Agriculture Minister Bridget ­McKenzie, last night called on the government to “lift its game” and become “more assertive” in trade negotiations, warning that “we are at risk of losing these markets”.

“The real headline is that we can’t be complacent, and the competition in these markets is fierce,” he told The Australian.

Mr Mahar said a blatant lost opportunity for Australian agricultural exports was parliament’s failure to sign off on a free-trade deal with Indonesia. “We desperately need parliament to ratify that agreement so it can come into force as soon as possible,” he said.

Mr Mahar’s warnings came as former trade minister Andrew Robb sounded the alarm over Australia’s political relationships with Southeast Asian nations.

Mr Robb hailed Scott Morrison’s Pacific step-up strategy since he became Prime Minister a year ago but said there was a case to shift Australia’s attention “even more” to Southeast Asia rather than focusing on our trade ties to the US and China. “Those (Southeast Asian) countries are where we should have our biggest responsibility, frankly,” he said.

“We’ve got to work with the world, and especially the US and China, but if our priority shifted to Southeast Asia, then what we say and do when China does something or when the US does something which affects one another, we need not end up … as meat in the sandwich, being used and ab­used to send messages through.”

Dairy industry leaders this week warned a Senate committee that failure to ratify trade deals with Indonesia and Hong Kong could see competitors, including the EU, steal a march on Aus­tralia’s $3.4 billion dairy export market.

The Australian Dairy Industry Council said Australia’s share in the global market had slipped from 16 per cent in the 1990s to 6 per cent last year, leaving it fourth for dairy exports behind New Zealand at 40 per cent, the EU at 28 per cent and the US at 14 per cent.

In response to Mr Mahar’s comments, Trade Minister Simon Birmingham said: “Our booming agricultural exports into markets like Japan, South Korea and China have been made possible thanks to the trade deals our government has delivered into these and other markets.

“Under the review mechanisms contained within these agreements we will look at every opportunity to get our farmers even better terms and access wherever possible.’’

Senator Birmingham called on Labor to “remove uncertainty around the ratification of our trade deal with Indonesia by clearly indicating their support for it as soon as possible”.

“As soon as the required public inquiry process is complete we will bring legislation for the Indonesian agreement to the parliament, which will pass this year so long as Labor doesn’t obstruct it.”

In a statement to The Australian, Senator McKenzie said the purpose of her first trade mission was “to engage long-standing partners and build on new opportunities” and said the facts on Australia’s trade performance “speak for themselves.”

“Our food and fibre exports are at historic highs and growing strongly,” Senator McKenzie said.

She said Australia had free trade agreements with China, Korea and the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“These agreements cover the vast majority of our trade and have contributed to the high prices many of our producers are seeing,” Senator McKenzie said.

“A key message from our discussions in north Asia is that it is important in an increasingly complex and challenging environment that our industries value our relationships with long established and important trading parties.”

Mr Mahar has visited Japan and South Korea and will head to Vietnam next. In Japan, he said, the Trump administration had just committed to a bilateral agreement that allowed more imports of US beef, which could leave Australian producers behind in a market of great potential. “We have a restrictive quota and we need to make sure that Australia does not relax in terms of this market,” he said. “We need to push the government to push for greater trade opportunities.”

In South Korea, Mr Mahar said, other countries had access for certain types of agricultural produce where Australia did not, including stone fruit such as nectarines. “We have an import ­protocol for mangoes, but not an import protocol for stone fruit,” he said.

Mr Mahar added that as a “counter-seasonal market”, Australia had a natural advantage that was not being exploited.

“We see Chile, the US, South Africa, all of these countries, pushing to get into China, Korea and Vietnam,” he said. “We are really at risk of losing our competitive pressure in these markets.”

Mr Mahar praised Ms McKenzie for hosting the trade mission with agricultural leaders rather than traders. “It’s a producer and government approach,” he said.

Like Mr Robb, Mr Mahar warned that trade war tensions between the US and China could catch Australian farm exports in the crossfire. “Given the troubling and concerning geopolitical environment, we desperately need the Australian government to put Australian farmers first and push for more developed and open liberalised trade,” he said.

Mr Mahar said the NFF’s target of raising farm gate output, which was a drought-affected $58bn in 2017-18, to $100bn by 2030 was achievable if great efforts were made by industry and government and extraneous factors did not intervene. “What we don’t want to see is trade wars impacting on the growth of agricultural trade in Australia,” he said.

Representatives from the dairy council appeared before the Senate’s joint standing committee on treaties this week to urge all sides of politics to support agreements that, they said, would see a 4 per cent tariff removed on many Australian dairy products to Indonesia and a process established to resolve non-tariff barriers to both Hong Kong and Indonesia.

An Australian Food and Grocery Council report estimated the cost of non-tariff barriers to the dairy industry at $1.6bn.