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Industry reaction to TPP announcement

Beef Central, 06/10/2015

Reaction from industry and trade sources to the news of the completion of the Trans Pacific Partnership agreement  has been overwhelmingly positive this morning, however some groups have qualified their comments, awaiting further detail.

Here’s a sample of the early responses, both from within Australia and overseas:

 

Cattle Council of Australia: Game changer for new market opportunities and reductions in trade barriers

Cattle Council of Australia welcomes the conclusion of the Trans-Pacific Partnership negotiations which upon entry into force will significantly provide increased market opportunities for Australian grassfed beef producers.

After five years of intensive negotiations between twelve countries, the TPP will drive sustainable growth, promote innovation, enhance job opportunities and most importantly reduce trade barriers.

CCA president Howard Smith said the agreement signifies a game changing opportunity for Australian beef.  As an industry we see a very positive future for our export markets.

The TPP will further liberalise our beef trade to Japan and will also eliminate tariffs on our products destined for Canada, Mexico and Peru.

“Canada and Mexico have been long term customers for Australian beef and  this deal can only further enhance our trade partnership

“Once fully implemented, the TPP will see the import tariff applied by Japan reducing to 9 per cent while the elimination of tariffs by both Mexico and Canada within 10 years, this is an outstanding result.

“This rapid growth in market access in the Asia Pacific region will build an unprecedented opportunity for our farmers, local communities and businesses” Mr Smith said.

Cattle Council has supported the successful conclusion of the TPP agreement since the beginning of the negotiations.

As a member of the Five Nations Beef Alliance (FNBA), CCA with support from beef producers in Canada, Mexico, New Zealand and the United States, urged all participants involved within the TPP negotiations to action a trade liberalising agreement as soon as possible.

“As a member of the FNBA, beef producers from around the world have worked together to achieve these improvements, delivering a level playing field for fair and transparent competition,” Mr Smith said.

 

Meat & livestock industry peak councils:

A statement issued by Meat & Livestock Australia on behalf of red meat industry peak councils said the following:

The Australian red meat and livestock sectors will benefit from improved market access arrangements following the conclusion of the Trans-Pacific Partnership (TPP) negotiations announced by Trade Ministers in Atlanta today.

Under the TPP, the tariffs levied on Australian beef entering Japan will be further reduced from those negotiated under the Japan-Australia Economic Partnership Agreement (JAEPA). The tariff on both frozen and chilled beef will fall to 9pc over 15 years – as opposed to the end point of 19.5pc for frozen beef and 23.5pc for chilled beef secured under the JAEPA. All TPP member countries supplying beef to Japan will be similarly advantaged by these TPP tariff cuts. A global beef safeguard provision will apply to this trade.

In addition, processed red meat import tariffs applied by Japan, which currently range from 6-50pc, will be eliminated within 15 years; the majority of offal tariffs eliminated within 10-15 years; and the tariffs applied to live cattle imports will also be eliminated.

In Canada, the current 35,000 tonne beef quota (0pc in-quota tariff) will remain, however, the above quota tariff of 26.5pc will be phased out.  Additionally, the 2.5pc tariff on Australian sheepmeat will be eliminated on entry into force (EIF).

For Australia’s trade to Mexico, the current 20-25pc beef tariff will be eliminated within 10 years; the 10pc sheepmeat and goat meat tariffs will be eliminated within 8 years; the majority of offal tariffs will be eliminated on EIF; and the 10-15pc tariffs on live animals will also be eliminated on EIF.  In Peru, which represents a new market opportunity for Australian red meat, the 17pc beef tariff will be phased out and the 9pc sheepmeat and goat meat tariffs will be eliminated on EIF.

For the remaining TPP members, existing bilateral agreements have, or are already delivering market access improvements.

“These TPP benefits are most welcome and importantly complement the gains already secured for the Australian red meat and livestock industry from the recent suite of FTAs Australia has previously concluded,” the chairs of the Australian red meat and livestock industry peak councils said.

“TPP members account for about 52pc of Australia’s beef, sheepmeat and offal trade and the existing import tariffs applicable to Australia’s exports destined for TPP markets represent an annual tax on the supply chain of around $1 billion. The gradual removal of this cost burden will positively impact the profitability of Australian cattle and sheep producers, processors and exporters,” the peak council Chairs said.

“The implementation of the TPP agreement will also help to ensure that the Australian red meat supply chain remains internationally competitive – with more seamless trade rules, reduced costs and less red tape making it easier for our sector to respond to the growing consumer demand across much of the Asia-Pacific region.”

The Australian red meat and livestock industry extends its thanks to the Minister for Trade and Investment and his negotiating team for the tireless effort in what has been a difficult and protracted series of negotiations.

“The advantageous outcomes achieved will help to favourably position the Australian red meat and livestock sector for years to come – while the establishment of a reform framework will pave the way for future trade transformation should the TPP membership base widen,” the industry said.

 

NFF: a positive result for Australian farmers

The National Farmers Federation welcomes the conclusion of the Trans-Pacific Partnership which will improve market access for a range of agricultural commodities, including red meat, dairy, fibre and grains. 

Reaching agreement between twelve countries was always going to be difficult and represents a huge milestone. The agreement is a generally positive outcome for Australian farmers, which will reduce trade barriers and create new export opportunities for our high-quality food and fibre.

The historic TPP market access outcomes build on existing trade agreements and includes some of the world’s biggest economies (the US, Japan, and Canada). Australian farmers exported around $15 billion of agricultural goods to TPP countries in 2014, representing about one third of total exports of agricultural products, and is set to increase as a result of this agreement.

The TPP will eliminate 98 percent of tariffs on Australian exports to TPP countries and create longer term benefits for Australian farmers beyond those that can be achieved in a bilateral free trade agreement, specifically in the three countries where we did not have agreements in place, namely: Canada, Mexico and Peru. Importantly, the TPP will also provide for the opportunity over time to include other economies in the Asia-Pacific.

Farmers currently face a range of tariff and non-tariff barriers across the region. Reduced tariffs and greater certainty on rules means more market opportunities and more investment and this means more jobs and growth in regional centres.

More specifically, the agreement greatly improves market access and terms of trade for a number of Australian commodities. In the red meat sector, beef tariffs will be further reduced in Japan and Mexico and will result in the elimination of price safeguards in the United States. Tariffs on sheep meat exports to Mexico will be eliminated in eight years and from day one of the agreement coming into effect in all other TPP countries.

In the grains sector, the agreement will result in the creation of new quota volumes for wheat and barley exports to Japan under the simultaneous buy-sell mechanism which were worth approximately $481 million in 2014. It will also provide for new quota access for roasted malt exports, while tariffs on exports of Australian wheat and barley to Mexico will be eliminated.

The TPP will eliminate all remaining tariffs on Australian raw wool and cotton exports to TPP countries from day one of the agreement coming into effect and also deliver improved rules of origin for textiles, which will encourage greater demand for Australian fibre products.

While the TPP should be supported, it is of course regrettable that more leadership was not demonstrated by the likes of the US in sectors such as sugar where the agreement will result in a modest increase in exports of 65,000 tonnes into the US market plus an opportunity to supply a percentage of the projected growth over the next decade

While not reaching the high ambition sought by some sectors, there should be no doubt that Australia needs to be a party to the TPP deal. The nature of agreement means that exclusion from a completed TPP agreement would have delivered significant negative outcomes for Australian agriculture.

Regardless, reaching consensus with twelve other nations is significant and game changing for trade. We would like to thank Minister for Trade and Investment Andrew Robb and officials for an unwavering commitment to finalise a comprehensive and liberalising agreement for the Australian community.

On the whole, there is no doubt this agreement will improve trading conditions for Australian farmers, and must be seen as a baseline template for future plurilateral agreements. 

                 – National Farmers Federation President, Brent Finlay.

 

US Department of Agriculture

US Agriculture Secretary Tom Vilsack made the following statement following the successful conclusion of negotiations on the Trans-Pacific Partnership:

“An agreement on the Trans-Pacific Partnership (TPP) negotiations provides a more level playing field in trade for American farmers. The agreement would eliminate or significantly reduce tariffs on our products and deter non-science based sanitary and phytosanitary barriers that have put American agriculture at a disadvantage in TPP countries in the past. Despite these past barriers, countries in the Trans-Pacific Partnership currently account for up to 42pc of all US agricultural exports, totaling $63 billion.

Thanks to this agreement and its removal of unfair trade barriers, American agricultural exports to the region will expand even further, particularly exports of meat, poultry, dairy, fruits, vegetables, grains, oilseeds, cotton and processed products.

“Increased demand for American agricultural products and expanded agricultural exports as a result of this agreement will support stronger commodity prices and increase farm income. Increased exports under TPP will create more good paying export-related jobs, further strengthening the rural economy. Today, agricultural trade supports more than 1 million jobs here at home and contributes a trade surplus year after year to our nation’s economy. All of this activity benefits rural communities and keeps American agriculture on the cutting edge of global commerce. The TPP agreement will contribute to the future strength of American agriculture and helps to ensure that the historic agricultural trade gains achieved under President Obama since 2009 will continue.

“Failing to grasp this opportunity would be a mistake: worse than just losing out on potential gains, our producers would fall behind other countries that are negotiating their own preferential arrangements in TPP countries. We are committed to working with Congress within the framework of the recently-passed Trade Promotion Authority to obtain a strong bipartisan understanding of and support for this historic trade deal that benefits farmers, ranchers, and all those who live, work and raise families in rural communities.”

American Meat Institute president and CEO Barry Carpenter expressed support for the deal saying the TPP was essential to the stability and long-term viability of our industry by expanding US beef, pork, lamb and poultry exports.  “The agreement holds enormous potential for American meat exports, and levels the playing field for American workers and business in the world’s fastest growing economic region,” he said.

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