Address to New Zealand Primary Industries Summit 2023
by
Ms Amy Guihot, Deputy High Commissioner, Australian High Commission to New Zealand
3 July 2023
“Australian agricultural trade priorities”
Tēnā koutou, tēnā koutou, tēnā koutou katoa
Good morning. It is an honour to be invited to participate in this summit, alongside some of my diplomatic colleagues.
I’m really pleased to be speaking at the New Zealand Primary Industries Summit to provide an update on Australia’s international trade policies and developments. Given the audience, I thought I’d stick to a subject close to my heart and focus primarily on agricultural trade.
My first international trade role was as the Agriculture Counsellor in Beijing, and I later did a similar role in Hanoi. And while Australia and New Zealand are competitors in international markets, what struck me when reflecting on my previous postings was how similar Australia and New Zealand are in our approach to international trade.
I worked closely with my New Zealand colleagues in China and Vietnam to shape the development of food safety laws in both countries – encouraging the right balance right between a strong food safety system and trade in goods.
Australia, like New Zealand, appreciates the importance of having open and fair markets for trade in agricultural products.
We both did the hard yards back in the 1980’s and 90’s to ensure we met our obligations to the World Trade Organization Agreement on Agriculture.
Our farmers are some of the least subsidised in the world. We apply relatively few tariffs and quotas on agricultural imports and we do not put in place export bans or subsidies.
Sadly, the rest of the world did not follow our lead. Between 2019 and 2021, 54 major countries provided USD 817 billion per year in support to agriculture, an increase of 13 per cent (or USD 97 billion) on the previous period (2018 to 2020).
The EU, US and China make up the majority of this agriculture support.
Agricultural subsidies can distort trade and depress world prices, which disadvantages unsubsidised producers in Australia and New Zealand as well as in developing countries.
Worse still, by artificially reducing competition, agricultural subsidies disincentivise producers from increasing the productivity of their farming practices and innovating.
Most forms of agricultural support encourage production decisions that result in greater greenhouse gas emissions and environmental damage – potentially impacting future agricultural productivity and food security.
The most prospective approach to long term agricultural reform is one with the food security concerns of developing countries squarely in focus and a shared commitment to reduce the environmentally damaging effects of certain highly-intensive agricultural practices.
Reform of trade-distorting and environmentally harmful agricultural subsidies would contribute to global efforts to mitigate climate change and strengthen food security.
Through the Cairns Group, Australia and New Zealand continue to work with likeminded countries to advocate for reductions in domestic support, including in the lead up to the next WTO Ministerial conference.
We acknowledge that getting outcomes in the WTO remains challenging. That is why both Australia and New Zealand commenced negotiating Free Trade Agreements with our major trade partners.
The first of these was, of course, the Closer Economic Relations Trade Agreement between Australia and New Zealand, which celebrates its 40th anniversary this year. CER remains our most comprehensive trade agreement.
Australia now has 17 FTAs with 29 countries.
Australia’s newest FTA to come into force is the Australia-United Kingdom FTA, which removes 99 per cent of tariffs on our two-way trade. I note Prime Minister Hipkins advised this morning that the NZ-UK FTA removed 99.5 per cent of tariffs. Rather than open up Trans-Tasman rivalry on this one, I want to focus on what a fantastic outcome this is for free and open trade.
It is welcome that the UK government has chosen to take the opportunity post-Brexit to change their trade policy positions in this way. I know there has been some pushback in the UK farm sector as a result, but I am confident that UK farmers, like the Australian and New Zealand farmers before them, will be more innovative, profitable and resilient as a result.
FTA outcomes can only take us so far, particularly in a time of rising protectionism.
Non-tariff barriers to trade are increasing, threatening countries’ ability to maintain and grow their exports.
Some estimates show that non-tariff barriers cost three times as much for exporters compared to formal trade barriers such as tariffs, and disproportionately affect developing countries.
The agriculture industry which is often one of the most impacted.
We respect the right of all governments to regulate to protect human, animal and plant life in their territories, but this should still occur within the limits of international rules.
We support efforts to encourage more sustainable production processes, including efforts to reduce greenhouse gas emissions. But what ‘sustainable’ looks like can vary greatly, depending on environmental and other conditions.
That’s why it is – and should be - up to each country, each economy to determine its own regulatory settings.
Unilateral standard setting that seeks to influence production systems in third countries is not only wrong, it can also lead to perverse sustainability outcomes.
The Australian Government is working bilaterally, regionally and multilaterally to promote regulatory approaches based on science and evidence.
And we are working to ensure the often world-leading sustainability approaches developed and implemented by Australian producers are included.
As the world transitions to a greener global economy, we expect more non-tariff barriers to emerge, amplified by geo-strategic competition
Strategic, proactive approaches to addressing non-tariff barriers are more important than ever – and we are keen to work with other countries, including of course New Zealand, to address and minimise these types of barriers.