NFF: farm benefits litmus test on TPP’s future

NFF: farm benefits litmus test on TPP’s future


Farm Online News
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NATIONAL Farmers’ Federation (NFF) President Fiona Simson has endorsed ongoing pursuit of the Trans Pacific Partnership’s (TPP) ratification; potentially without the US.

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NFF President Fiona Simson.

NFF President Fiona Simson.

NATIONAL Farmers’ Federation (NFF) President Fiona Simson has endorsed ongoing pursuit of the Trans Pacific Partnership’s (TPP) ratification, based on its ability to deliver trade benefits for Australian farmers; potentially without the US.

Speaking after US President-elect Donald Trump indicated his powerful farm exporting nation would not sign the TPP, in one of his first executive orders post-inauguration on January 20, Ms Simson urged the Australian government to press ahead.

“We think the opportunities presented in the TPP have the potential to be transformational for Australian agriculture; with or without the US,” she said.

“Ideally it would have been preferable to have the US in there, but there are significant gains in the deals that we have struck, or that we are striking, through that agreement with other countries as well.

“We’re keen to see the TPP progress and we don’t like to think that it’s dead in the water.

“We think Labor and the Coalition have supported free trade and the benefits that free trade brings to Australian agriculture and we’d like to see both parties actually endorse those benefits through legislation, if necessary, if this agreement comes to parliament.”

Despite tough-talking President Trump, who campaigned on a protectionist platform to defend US manufacturing and assist job creation, saying the TPP was bad for his country, Ms Simson said Australian farmers “certainly don’t want to see it over”.

“We think there are significant gains to be made and we want to see a continued push for the TPP’s ratification,” she said.

“As has been pointed out in the media recently, other Presidents have made sweeping statements prior to their election that they’ve then reneged on once they’ve taken office.

“We understand that President Trump wants to see gains for the US and has promised his constituents that the TPP agreement should be good for the US and that anything he does is good for the US.

“We have the same desire from our side as well, so if the agreement is good for Australian farmers then the NFF wants to see it continue and succeed; that’s really the litmus test.”

Labor was quick to seize on advancement of Mr Trump’s plans to scuttle the TPP - that is yet to be ratified despite negotiations concluding in October 2015 between the 12 Pacific rim countries - with shadow Trade and Investment Minister Jason Clare saying it was “dead”.

“That big trade agreement of 12 countries in the Asia Pacific includes a clause that says if America doesn’t sign up then the whole agreement doesn’t exist,” he said.

“Donald Trump’s made it clear from day one that he’s not going to sign that agreement.

“The other 11 countries could decide to put together an alternate agreement - but the government has already said that if America is not part of that agreement then it changes the economics substantially.

“It may not be as good for Australia.”

Australia is joined in the TPP by the US, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

A USDA report released in March 2015 said the potential gains by eliminating agricultural and non-agricultural tariffs and tariff-rate quotas, under a TPP agreement, were significant.

It said the largest percentage gains in agricultural output - based on forecast projections out to 2025 - would be meats in Australia and dairy in NZ.

A total forecast increased trade in meats of about US$3.7 billion would be mostly 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.

The report said Australia would increase agricultural trade by US$2.611b (19.2pc) to the 11 other TPP countries led by exports in cereals (US$161m), meat (US$1.61b) and dairy (US$357m).

Mr Clare said he’d asked the government for economic modelling on what it would mean for Australia if the TPP existed, without the US.

“They said they don’t have any economic modelling so we have to wait and see on that front - what we do know is that Donald Trump is not going to sign the TPP, so we need to look at what are the other options for Australia,” he said.

“They include making sure that we sign up to agreements with countries like Indonesia, our next door neighbour which has a quarter of a billion people.

“They’ll be one of the biggest economies in the world by the middle of the century and trade is massively underdone with Indonesia at the moment.”

Mr Clare said there was also an opportunity to pursue alternate regional trade agreements.

“The TPP was led by the Obama Administration,” he said.

“There’s an alternate agreement led by the Chinese called RCEP that includes India, Japan as well as Australia and all the ASEAN countries.

“I suspect with the Americans retreating away from the TPP the Chinese may step up now and try and finalise that agreement.”

Trade and Investment Minister Steven Ciobo said President Trump’s decision not to ratify the TPP at this time was disappointing – but not unexpected.

However, he said the TPP was too important as a driver in creating more Australian jobs “not to do all we can to see the agreement enter into force”.

“The TPP is an agreement of unprecedented scope and ambition,” he said.

“It promises new export opportunities for our farmers, services suppliers and goods exporters.

“A number of options are available to us and there is a strong desire to ensure the benefits of the TPP are not lost.

“Ratification of the agreement is the strongest message we can send on the importance of the TPP.

“It would be a clear statement from the Australian Parliament that we reject protectionism and that open markets are the path to long-term sustainable job creation.

“We look to Bill Shorten and the Labor Party to support TPP ratification.”

Mr Ciobo said Australia was a trade-exposed nation and about $670 billion a year in exports relied on good access into markets like Korea, Japan, China, the US and others.

He said he was focussed on ensuring Australia captured the TPP’s value opportunity - but had been “very concerned” to see Labor leader Bill Shorten and his party “once again moving away from the promotion of export deals and the benefits of trade”.

“We saw the Labor Party do this just prior to the China-Australia Free Trade Agreement coming into place,” he said.

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