$3.3b wool sales, but

26 Nov, 2003 10:00 PM


AUSTRALIAN woolgrowers exported $3.3 billion of wool in 2002/03 with the lion's share ending up in China, but trade barriers continue to affect wool prices.

Australian Wool Innovation trade development manager Bob Quirk said trade barriers cost woolgrowers $17.5 million but the only way savings could be made was at the government level through trade negotiations.

China accounted for 39pc of Australian wool exports, followed by Italy 16pc, Korea 7pc, Taiwan 5pc, and India 5pc.

He said Australian tops to Italy attracted a 2pc import tariff while the tariff for Italian yarn to China was 11pc.

The tariff on a finished garment made in China and exported to the US was 14pc.

"At each stage a higher tariff is being applied to a higher valued product," he said.

He said only governments could make changes to trade policy through formal negotiations at the multilateral - World Trade Organisation - regional or bilateral level.

"AWI has taken a lead role in consulting with other industry stakeholders on trade related issues to derive maximum benefit for woolgrowers and for industry," he said.

"A key element in this process is having good, if not excellent working relationships with key officials, particularly in the department of Foreign Affairs and Trade."

Mr Quirk said the WTO multilateral process was the only forum Australia could lobby to have tariffs on tops, yarn, fabric and finished products reduced or removed.

"This is particularly important in circumstances where we are effectively an interested third party," he said.

But there were also other non-tariff barriers of concern to woolgrowers, including an increasing number of environmental and labour laws, as well as quaratine regulations - which was especially relevant to Australia.

"We in Australia are under pressure from claims we use quarantine protocols as a form of non-tariff barrier," Mr Quirk said.

"It considerably weakens our strength and negotiating ability when we expect other countries to reduce or remove their import tariffs when we are still maintaining relatively high levels in our own backyard."

But global trade action was not the exclusive domain of multilateral arrangements, with regional and bilateral free trade agreements already accounting for 50pc of goods and services.

Leading the way has been the US which is negotiating 37 different regional or bilateral FTAs.


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