NATIONAL Farmers' Federation (NFF) president Brent Finlay wants Australian negotiators to aim high and enhance outcomes for agricultural exports, when talks recommence on the Trans-Pacific Partnership (TPP) agreement this week in Maui, Hawaii.
Meanwhile, the NFF’s US equivalent - the American Farm Bureau Federation – will seriously scrutinise the TPP’s final fine print, before declaring whether it has won their support or not.
After TPP talks formally started more than five years ago, Trade and Investment Minister Andrew Robb hopes this week’s negotiating forum will all but conclude the comprehensive trade and investment agreement between the 12 Pacific Rim countries.
Mr Robb believes the deal is near finalisation, but the real outcome of negotiations for sensitive trade items like Australian sugar exports and US beef imports, will prove its ultimate legitimacy.
He said the Australian government wants to deliver commercially meaningful outcomes for Australian agricultural exports like beef, dairy, grains, sugar, horticulture, seafood and wine, while securing gains for local resources and energy exports, manufactured and other goods.
“The TPP has transformational promise and would put in place the architecture for a more seamless trading environment between member countries which will bring significant new benefits for Australia,” Mr Robb said.
“The negotiations are at a very advanced stage and we are pushing hard to ensure we can secure major gains and opportunities for Australian business and for our economy.”
The agreement was supposed to be concluded in 2013 but has suffered various delays, including recently stalled deliberations by the US congress on its fast-track legislation.
The US Congress voted down the Trade Promotion Authority (TPA) legislation it needed to allow executive authority to negotiate trade deals based on broad guiding principles like increasing farm exports and job creation.
Democrats originally voted against their own TPA bill but it eventually passed last month, giving President Barack Obama’s administration necessary powers to negotiate the TPP, which analysts now hope can be concluded by the year’s end.
A final TPP deal still needs to be signed-off by the US congress but the Farm Bureau’s Congressional Relations senior director David Salmonsen told Fairfax Media his group’s support wasn’t automatic.
“We don’t have policies that say we’re for or against any specific trade agreement,” he said.
“When the agreement’s done, our board of directors will then review it and we’ll do some internal analysis and they’ll decide if we support it or not when it goes before our congress.
“But along the way though, we have an idea of what we want to see in it and we are consulted about what farmers want to see in it.”
Mr Salmonsen said the Farm Bureau applied a set of guiding principles to its scrutiny of any trade agreement, including looking for commercially meaningful market access gained by reducing different trade barriers.
He said the TPA bill outlined a series 18 or 20 negotiating objectives for agriculture like lower tariffs, reducing non-tariff trade barriers and adhering to science based regulation versus “protectionist trade regulation” between various trading partners.
Another negotiating objective, he said, was ensuring the final TPP delivered more rapid and effective dispute resolution processes, especially for fruit and vegetable and meat exporters “who don’t like to see their product rotting on the dock before it goes through customs” which has been a problem with trading partners previously.
Mr Salmonsen said originally, the TPP wasn’t very impressive for US agriculture as they already had free trade agreements with most of the 12 countries, but it became more attractive when Japan signed-on.
He said a high level of trade already occurred between the two nations, despite the US having never had an FTA with Japan which “hides” agricultural trade behind many tariff barriers.
But Mr Salmonsen said the US was now playing catch-up on Australia which recently concluded an FTA with Japan, especially on beef tariff reductions.
“Japan have had their sensitive products - everyone has sensitive products - but the real breakthrough happened earlier this year it seems when the Japanese finally realised you can call something sensitive all you want but to get a deal you’ve got to make some progress on every product, then they said they would do stuff on beef and pork and they’re still talking on dairy,” he said of TPP negotiations.
US election timing
Mr Salmonsen said a “big driver” behind pushing the TPA bill through congress last month, to help advance the TPP, was US presidential elections in 2016 and elections for all House of Representatives’ members and one third of the US Senate.
He said history had shown that it was not impossible but becomes increasingly difficult to pass legislation, the longer an election year progresses.
But if an agreement on the TPP is reached between ministerial negotiators, it could be presented to the US congress for a vote by the end of this year or early next year, he said.
“There’s a little added pressure because Australia will have access to better tariff treatment with Japan, so we’d like to get our deal with Japan done,” he said.
“But at the end of the day we always say and everybody does, no deal is better than a bad deal.
“When we’ve seen the final agreement and when they say ‘this is it’ and it’s released, and we can really analyse it and see the numbers in the text, and know what it’s going to mean we’ll do our analysis.
“The US International Trade Commission does formal analysis, we’ll do our own analysis internally and other different agencies will also do one, looking at what it means for their sector.
“The Farm Bureau represents all commodities in the US and farmers and producers who are our members so we don’t have to look at one thing, like a single commodity organisation does, like beef, pork or dairy producers who have all their eggs in the one basket,” he said.
“We’ll look at what the access will get across the board for all agricultural products and aggregate it.
“We’ll analyse the whole agreement and if it comes up positive – and it’ll be our board of directors’ decision - we’ll look more favourably on it.
“This has been going on for decades and is something that’s normal for us to do, but it becomes a political fuss for those who don’t like trade and those who do.
“We keep up with what’s going on – we’ve done this before with FTA’s – we know how to look at tariff and non-tariff barriers, and what they’re going to do for agriculture.”