Aus-China FTA at ’critical point’
North Queensland Register | 5 Nov 2014
Aus-China FTA at ’critical point’
COLIN BETTLES
KEY Australian agricultural representatives travelled to China this week to offer their industry’s specific response to last-minute offerings on critical trade developments.
The Cattle Council of Australia (CCA) and Sheepmeat Council have made the journey, along with livestock processing representatives and the National Farmers’ Federation (NFF).
It’s understood the agricultural talks must be concluded on Friday to ensure the Australia-China Free Trade Agreement (FTA) can be signed when Chinese President Xi Jinping visits Australia for the G20 next week.
Trade Minister Andrew Robb is also expected to arrive in Beijing early Friday morning for talks with his Chinese ministerial counterpart, Gao Hucheng, when an in-principle deal may be struck.
NFF president Brent Finlay is not a member of the delegation but said it would be an intense week of negotiations and "agriculture is always the hardest and last part of trade negotiations".
Speaking to Fairfax Media from China, CCA chief executive Jed Matz said every indication had been given that the FTA negotiations were now at a “really critical point”.
Mr Matz said the CCA’s role, and that of other ag groups in China this week, was to ensure the best possible outcomes were achieved. He said beef was a sensitive commodity in the negotiations, given Australia’s beef exports to China had increased significantly over the past few years.
Echoing the key message underpinning a trade delegation to China in September involving about 40 farm delegates and Agriculture Minister Barnaby Joyce, Mr Matz said Australia had neither plans nor capacity to flood the Chinese market with beef if tariffs were lifted, as is being urged in the FTA deliberations.
“We’re here to ensure we get the best deal we possibly can, as our members would expect us to,” he said.
“The negotiators will be getting various offers and will need to find out from industry if those offers are commercially viable.
“We’re here to ensure the Department of Foreign Affairs and Trade officers and negotiators have a touch-point and can speak to industry to see if the offers are any good or not.”
Equivalent or better than NZ deal
Mr Matz said the red meat industry’s key message to Australian negotiators was to have an FTA equivalent to or better than the New Zealand-China FTA, with import tariffs totally eliminated over time.
“That would put Australian cattle producers on a level playing field with NZ and allow us to compete based on quality of product and not on the basis of tariff costs,” he said.
Australian Meat Industry Council chair and Atron Enterprises managing director David Larkin is representing beef processors in the delegation, while Roger Fletcher of Fletcher International Exports is representing the sheepmeat processing sector.
Other Australian commodity groups are also part of the delegation, including dairy and sugar representatives.
Australia exported around 12,000 tonnes of mostly lamb and sheepmeat into the China market in 2004-05, according to Meat and Livestock Australia - but last year more than 160,000 tonnes of beef, more than 100,000 tonnes of lamb and sheepmeat and 94,000 live Australian cattle were exported to China, worth over $1.4 billion.
The Australian Bureau of Agricultural Resource Economics and Science (ABARES) outlook conference this year reported China’s beef imports are poised to rise by almost 1000 per cent over the next 40 years.
ABARES commodity analyst Jammie Penm also said goat and sheep imports could rise by 1844pc.
Risking Australia’s position
During the September trade delegation, Mr Joyce called for clarity saying Australia was never going to be the food basket of Asia and “it was one of these ridiculous things that has been said for too long”.
On Monday, Shadow Assistant Treasurer Andrew Leigh expressed concerns Australia had limited its negotiating position by declaring a deadline to sign an FTA with China by the year’s end.
“If you’re negotiating to sell your house the last thing you want to do is to tell the other party, ‘well I’ve got to have it done by this particular time’ and that risks not getting a great deal,” he said.
“Labor reckons we need what New Zealand got plus a better deal.
“The NZ–China free trade agreement should be our starting point, Australia should be able to better that.”
Victorian Liberal Senator Mitch Fifield said Mr Robb was hopeful of concluding the FTA with China by the end of the year.
“Andrew Robb has been phenomenally successful as Trade Minister, securing the free trade agreements with Japan (and) with South Korea,” he said.
“We’ve just got to work purposefully with our Chinese partners.
“They want something that is in their national interest.
“We want something that is in our national interest and we’re hopeful that there will be enough common ground that we can conclude that deal.”
Mr Robb has said opportunity exists to finalise an FTA with China due to strong political will, creating a ground breaking deal for Australian agriculture given the rising consumer demand for key products like beef and dairy.
“I know as well as anybody the importance of the beef industry - I also understand their frustrations and I encourage them to go as hard as they can in calling for lower trade barriers because this opportunity is in the long-term interests of market access for Australian beef,” he said in March.
Mr Robb said primary producers would benefit from a China FTA because they purchased 26pc of our total exports and were Australia’s largest export market for agriculture, resources and services.
