Sugar code jeopardises trade: Bishop

18 Jun, 2015 06:13 AM
It is important that Australia continues to maintain a credible reputation

FOREIGN Minister Julie Bishop has enlisted the support of the Queensland Labor government to kill off a push by conservatives to partially regulate the sale of sugar, saying it would breach Australia's international trade obligations and jeopardise future free trade agreement negotiations.

In a letter to Queensland's Agriculture Minister Bill Byrne, obtained by The Australian Financial Review, Ms Bishop urges him not to allow two private members bills, presented respectively by independent Rob Katter and Liberal National Party Opposition, to pass in the Queensland Parliament.

Mr Byrne responded in support of Ms Bishop against the move which is also being pushed by her federal Coalition colleague, Queensland LNP MP George Christensen, who holds the seat of Dawson.

"As you will be aware, the Australian government has established an ambitious economic and trade agenda to support the prosperity of all Australians," Mr Bishop's letter says.

"We are pursuing bilateral, regional and global trade agreements that not only open up new markets for Australian exporters, but help build a strong, rules-based architecture for global trade.

"Accordingly, it is important that Australia continues to maintain a credible reputation for being an effective and reliable partner with an exceptional record of compliance within the terms of our international trading agreements."

A proposed mandatory code of conduct for the sugar industry put forward by the Liberal National Party taskforce on sugar marketing would give canegrowers control over the sale of two-thirds of raw sugar produced by foreign-owned sugar mills in Queensland.

Wilmar International, which invested $1.75 billion in the industry in 2010, has claimed that the code of conduct amounts to "an expropriation of its property" and is in contravention of the Singapore-Australia Free Trade Agreement.

When the draft code was released, Wilmar's Australian representative Shayne Rutherford said: "Government expropriation of a manufactured product would have serious financial implications for the future viability of mills and set a concerning precedent for Australia's processing sectors".

"Why would anyone want to invest in an Australian

manufacturing or processing business if it doesn't own and control the product it makes?" Mr Rutherford said.

In his response to Ms Bishop, Mr Byrne said "you can be assured of my personal support and commitment to Australia's obligations within the present international trade agreements" and it was his preference that "this matter be resolved at a commercial level".

Mr Byrne said since the Howard government deregulated the sugar industry, "the sector has attracted significant investment and as a result of ongoing industry consolidation, many milling companies are now foreign owned".

"The scale of global investment has been substantial and this has facilitated capital replenishment in both cane farming businesses and mills at a rate that has not been seen for decades."

Mr Byrne says he is "well aware of the risks" posed by the private members bill proposed by Mr Katter, who holds the balance of power in Queensland's Parliament and says he is "equally concerned" about the proposed bill by the LNP opposition.

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Jock Munro
18/06/2015 6:47:17 AM

No one should be surprised that Julie Bishop would favour the big and over producers in the sugar marketing debate. Australian Agricultural producers should know never to trust the Liberal party-they are nothing but free market ignorant urban political elitist zealots.
18/06/2015 7:38:11 AM

Poor old Jock. Irrational as usual, obsessed to the point of futility.
Franks Final Grade Dugong Scrapers Walsh Shed
18/06/2015 9:46:47 AM

Sugar rice the new super food.
Jock Munro
18/06/2015 10:36:07 AM

Torobrook, thank you for your kind words. I can understand your disappointment with the fact that the QLD sugar producers have the political numbers to regain some equity in the market place. You merchants have had it all your own way for quite some time.
18/06/2015 10:53:24 AM

The antipathy to free trade or even free enterprise is the National Party. They just don't understand how the price mechanism regulates supply and demand. All other interference distorts this and the more distortion the higher sovereign risk. It fascinates me though that Bishop sees a sugar code as a risk but facilitated a wheat export code by not even whimpering!
Franks Final Grade Dugong Scrapers Walsh Shed
18/06/2015 1:41:22 PM

Fundamentally nothing will change. Growers in the circle of love with low prices and the prospect of non profitable crops and care taking the land with nothing planted at all. Thats what the bills needs to be covering.
Franks Final Grade Dugong Scrapers Walsh Shed
18/06/2015 6:33:07 PM

Ruduce the area grown by % per farmer holding, trade the unused % areas not been taken up between growers with whom want to grow more the price of this may be governed by the price of sugar. (with a subsidy?)
john kersh
18/06/2015 7:05:50 PM

The grower's need of a code is simply to counter Wilmar's intent to establish a total monopoly of the N/Qld sugar market .Wilmar established a serious lobbyist in Canberra some time back and he has clearly fooled Ms Bishop .She clearly needs to catch up with serious international media who have examined Wilmar's record on human rights abuse & environmental vandalism & subsequently rated them as 'the worst Company in the world ' Regards John
Jock Munro
19/06/2015 5:14:54 AM

Boris, Please explain how an Australian sugar single desk that gave our producers strength in the market place, could distort world trade.
19/06/2015 10:57:46 AM

WHAT FREE TRADE! Sugar is not considered a commodity to be included in FTA's, is it used as a political product. Here we have the right and proper thing to do to protect one of Australia's primary industries and we have a senior member of the Abbott government going off at this.
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