TPP 'critical' for Australian farming

20 Mar, 2015 01:00 AM
Trade Minister Andrew Robb.
Australia tops the list of percentage gains in agricultural trade according to the USDA modelling
Trade Minister Andrew Robb.

AGRICULTURE may be a contentious aspect of the Trans-Pacific Partnership (TPP) negotiations, although Australian farming could be a significant beneficiary of the high level trade deal, says federal Trade Minister Andrew Robb.

TPP negotiations commenced in March 2010 in Melbourne and were scheduled to conclude in 2013, but talks remain in limbo and are coming under increasing scrutiny.

Once settled, however, the partnership would act as a comprehensive trade and investment agreement between the 12 Pacific Rim countries involved, including Australia, the United States, New Zealand, Canada, Japan, Vietnam and Mexico.

Report shows TPP benefits

Mr Robb this week highlighted the recent findings for Australian agriculture in a US Department of Agriculture (USDA) Economic Service report titled Agriculture in the Trans Pacific Partnership.

The report looks at the potential gains to be made from eliminating agricultural and non-agricultural tariffs and tariff-rate quotas (TRQ) under a TPP agreement on the region’s agriculture in 2025 - the assumed end date of the pact’s implementation - compared with baseline values for 2025 without a TPP.

“The value of intraregional agricultural trade in 2025 under a tariff-free, TRQ-free scenario is estimated to be six per cent, or about $8.5 billion higher (in 2007 US dollars) compared with baseline values,” the report said.

“US agricultural exports to the region will be five per cent or about US$3b higher and US agricultural imports from the region in 2025 will be two per cent, or US$1b higher in value compared with the baseline.”

Subsequent reporting has highlighted a table in the 56-page document showing the TPP would have minimal impact on the GDP of negotiating countries.

But proponents say that data has been used to misleadingly suggest the TPP would not deliver any economic benefits.

Mr Robb believes the study actually indicates several key gains that could flow to Australian agriculture from the TPP.

“When you factor in potential gains from the TPP with the new levels of market access afforded by our landmark free trade agreements with Korea, Japan and China, there is real cause for optimism about the future prospects for Australian agriculture,” he said.

“Given Australia’s reputation for ‘clean, green and safe’ produce, we are extremely well placed to help meet increasing demand across the Asia -Pacific for premium quality food.

“Agriculture is always a key focus of our trade negotiations because its importance to our economy.

“It is one of our great strengths.”

How ag commodities will fare

The USDA report says with a combined population of about 800 million and a combined GDP of about US$28 trillion, the 12 TPP countries encompass 11pc of global population and almost 40pc of global GDP in 2012.

“The total size of their market for agricultural imports averaged US$279b over 2010-12 - 51pc of which was sourced from TPP partners,” it said.

“TPP countries shipped 43pc of their total agricultural exports - which averaged US$312b over 2010-12 - to their TPP partners in 2012.”

The report said, by commodity, the largest percentage gains in agricultural output in the 2025 TPP scenario would be meats in Australia, dairy in NZ and “other agriculture” in Singapore.

A total forecast increased trade in meats of about US$3.7b would account for 43pc of the expansion in the value of intra-TPP trade in 2025, most of which would be supplied by Australia, the US, Canada, and NZ.

“Expansion of Australia’s meat output will be largely due to its increased exports of bovine meat to Japan, the US and Canada,” the report said.

“NZ’s agricultural growth will be led by gains in its output of dairy and meat products as it increases its exports of these commodities to Japan, Canada, the US and Mexico.

“Growth in Singapore’s 'other agriculture' will be led by growth in its exports of processed food and feed products to Malaysia, Japan, and Vietnam.”

The report also showed Australia would increase agricultural trade by US$2.611b (19.2pc) to TPP countries, according to the 2025 scenario.

The big increases under that arrangement would be in Australian cereals (US$161m - 25.8pc), meat (US$1.61b - 25.8pc) and dairy (US$357m - 25.7pc).

However, oilseeds and products would suffer a US$1m drop equating to 0.5pc of the estimated $204m value in 2025.

Ag percentage gains

Australia tops the list of percentage gains in agricultural trade according to the USDA modelling, followed by Singapore (15pc), NZ (12.9pc), Japan (8.4pc), the US (5.4pc) and Vietnam (6.4pc).

In 2025, under a TPP, total exports between the 12 liberalised countries would be US$135,545b or a 6.3pc overall increase.

Agricultural trade to TPP countries would reach US$52.395b for the US, US$8.055b for NZ, US$993m for Japan, US$3.664b for Vietnam, US$1.357b for Singapore and US$13.629b for Australia.

National Farmers' Federation (NFF) president Brent Finlay said the TPP was viewed as being “critically important” for Australian farming’s future.

“When you have a trading arrangement like the TPP where 40pc of world trade sits within those 12 countries, concluding a deal is critically important for Australian agriculture,” he said.

Mr Finlay said the NFF had kept an eye on the most recent round of discussions in Hawaii which concluded last Sunday, but failed to make significant advancement on the negotiations.

“Our commodity members in the NFF are watching the outcomes of these negotiations very closely and we welcome gains for agriculture, but we also want to ensure there are no losses,” he said.

Mr Finlay said the TPP was primarily started as a plurilateral trade agreement between the participating countries.

But he said bilateral deals were now going on around it and becoming more of a focus for some countries, rather than its original intent to deliver an overall outcome.

“If it goes on for too long we’ll end up in another US presidential race and the whole thing will stop,” he said.

Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first


Genghis Khan
20/03/2015 5:38:15 AM

"according to the USA" - don't we have our own economists?, how can we agree to something if we are not privy to its details?. Our own researchers have told us FTAs have delivered no net benefit, so why will this differ. All I see is patent lock ups and a method to circumvent our countries legal system, with their own. This agreement makes a mockery of our sovereignty and everything our forefathers have stood for. This is just like the food safety issue, u let the people selling the product test and tell us what we need, conflict of interest? democracy and sovereignty out the window.
20/03/2015 6:37:31 AM

The US drop is protectionist tariffs and TRQ's! What a joke. Re-release this report on 1st April. It will have higher credibility!
20/03/2015 9:01:28 PM

More sweeping statements...We need to know what the benefits are and who they are to benefit. Some detailed analysis from an Australian rural economist would be more useful than some regurgitated biased US study. Andrew Robb would have to be an eternal optimist to think that the Yanks would give any advantage to Australian Primary Producers.
21/03/2015 5:05:49 AM

Unreliable figures based on political spin, not TPP's TEXT, not Oz academic analysis, not Oz corporate or farmer research. Negotiations are secret, except for USA-based transnational BIG-businesses advising & driving: secret because public truth would start citizen revolts in all proposed partner countries. If Australia gains international market percentage, within a few years the bulk of "Aussie farmers" will be overseas capitalist owners, using dirt-cheap 457-like migrant labour, sowing Monsanto patent seeds, using imported uncontrolled herbicides, etc. No benefit for Aussie people !!
21/03/2015 5:17:20 AM

Transnational companies will destroy our prime farmland, pollute our river systems, contaminate our aquifers & basins ripping out coal or CSG. End use of these products will destroy our climate balance leaving total uncertainty about feeding Australia, let alone the world. Australia and all nations will be swamped by climate-change refugees from flooded storm-ravaged places: islands & indian sub-continent. TPP & its consequences will serve one-year profit goals of transnationals. Aussie farmers will no longer protect this land. TPP and ISDS are disastrous. Stop TPP. It's toxic as CSG.
21/03/2015 7:37:52 AM

The TPP goes well beyond simple terms of trade and provides far greater protections and benefits for multinational companies at the expense of ordinary citizens, local jobs and industry and even the environment. Tariff matters are better left to bilateral agreements like FTAs between nations. These much wider, sweeping treaties have greater potential to cause irreversible damage.
21/03/2015 2:05:58 PM

As they say 'the devil is in the detail' but one specific detail is missing here - the ISDS or investor state dispute settlement. It enables foreign investors from TPP countries to sue governments if they behave in a way to harm their 'potential future profits'. As Philip Morris is suing over plain cigarette packaging so Monsanto could sue over any future hindrances such as rejection of GM patents, or GM labelling. All will be seen as anti-trade and harmful. Let's get it clear, this is not a trade agreement between 12 Pacific Rim countries but 600 US corporate advisors to multinationals.
14/05/2015 2:53:52 AM

"Australia tops the list of percentage gains in agricultural trade according to the USDA modelling, followed by Singapore (15pc)" All mention of Singapore's agriculture is described as "Other Agriculture" and as the info says above has the 2nd greatest gain in agriculture after Australia! More than America? what does "Other agriculture mean and what does Singapore produce in enough Output to be 2nd biggest beneficiary? its an Island not even 10 miles by 10 miles long THESE FIGURES ARE NOT TO BE TRUSTED!


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