HIGH level talks between agricultural officials from the Australian and Chinese governments have revealed new outcomes aimed at enhancing market access and boosting trade.
Farm exports to China were worth over $10 billion in 2016, with Assistant Agriculture and Water Resources Minister Luke Hartsuyker saying the newly struck agreements would enhance farm-gate value for some of the nation’s most significant agricultural industries.
The two countries also confirmed a joint commitment to food safety had been reached at the Sanitary and Phytosanitary High-Level Dialogue forum held today in Sydney, which included discussions on exports of Australian meat products and infant formula.
It comes shortly after China lifted its three-month ban on six of seven meat processing facilities on October 30 due to non-compliance with import labelling protocols that’s estimated to have cost local industry about $90 million.
Australia and China’s two-way trade relationship his valued at $13.2b with demand for products like livestock for breeding and slaughter purposes and beef and sheep-meat growing rapidly.
Outcomes agreed to between Australia and China
- A joint commitment to food safety confirmed
- New conditions for exports of live feeder and slaughter sheep and goats and improved conditions for exports of bovine, sheep and goat semen.
- Protocols providing market access for the first time for Australian peaches, plums and apricots and improved access for cherries, table grapes and citrus.
- A new protocol to support exports of Australian plant-based compound horse feed to China to support further expansion of the grain, fodder and stock feed trade.
Mr Hartsuyker said the meeting results reflected the trust and collaborative relationship between Australia and China on agricultural trade.
“Australia is a supplier of safe and high-quality meat and food products to China and ensuring the quality and safety of these products is in both countries’ interest,” he said.
“The recent positive outcome around the lifting of compliance-based suspensions on Australian meat establishments reflects the high level of cooperation between our two countries to work through issues in a constructive and collaborative manner.
“Australia is committed to being a reliable supplier of wholesome and safe meat to China and we have reconfirmed this commitment through the recent implementation of enhanced verification and audit procedures, which were developed in consultation with industry.
“These enhanced procedures will support improved food safety for Australian meat exports, to ensure Chinese consumers can continue to have access to the safe, high-quality produce that Australia is known for.
“Both countries also agreed to work closely to ensure the implementation of the Joint Statement signed earlier in the year, which includes expanded chilled meat access to China.”
Australian Livestock Exporters’ Council CEO Simon Westaway welcomed the new trade conditions and said livestock exporters acknowledged the federal government’s ongoing support for the live export trade as an important rural industry and export earner.
He said today’s announcement by Mr Hartsuyker created a new opportunity to develop Australia’s already strong livestock export relationship with China, which was worth $173m in 2016.
LiveCorp CEO Sam Brown said the outcome was the result of a genuine partnership between the industry and government.
“This has been a hard fought and welcome outcome and shows the benefits of industry working closely and in alignment with government to provide further opportunities for Australian livestock exports,” he said.
ALEC said the talks also confirmed that the 10 per cent tariff on slaughter and feeder cattle and slaughter sheep would be completely eliminated by January 1, 2019 which has fallen to 4pc following the China-Australia Free Trade Agreement (ChAFTA) coming into force.
Mr Westaway said Australian exporters and producers had identified great potential in the trade of feeder and slaughter animals to China and welcome improved access to the market and removal of tariffs.
“For example, the live feeder/slaughter cattle trade to China is now gaining momentum after initial air consignments last year, two seaborne shipments so far this year and further trade expected before Christmas,” he said.
“This trade with China represents new, closed-loop supply chains, with the highest levels of control, traceability and animal welfare in keeping with the Exporter Supply Chain Assurance System.
“Greater market access and diversification are high priorities for our industry.
“That’s why today’s announcement is important and why we will continue to pursue further trade opportunities like the resumption of sheep exports to Saudi Arabia.
“Historically, the Saudi trade has played a significant role in our sheep exports and we’re working with the federal government to re-open that market.
“Significant results can be achieved when industry and government work together, as today’s news regarding China demonstrates.
“We’re hopeful of a similar breakthrough regarding Saudi Arabia in the near future.”
Mr Hartsuyker said China was Australia’s tenth largest market for live animal exports, growing from $117m in 2010 to $173m in 2016 and largest market for breeder cattle.
“Australia has also been supporting the development of China’s dairy industry through the supply of high quality Australian dairy breeder cattle and sheep,” he said.
“This week we have finalised agreements for new protocol access for the export of Australian feeder and slaughter sheep and goats to China.
“Improved conditions were also agreed for facilitating exports of bovine, sheep and goat semen to China.
“I am pleased that we are supporting further growth for this important trade with one of our most significant trading partners, through the negotiation of these new protocols.
“Australia and China share a longstanding and mutually beneficial trade in livestock and genetic material.”
Grain and horticultural breakthroughs
Mr Hartsuyker said the horticultural breakthroughs at the talks meant Australian peaches, plums and apricots would soon be joining Australian nectarines on the shelves of Chinese supermarkets and greengrocers, “just in time for the upcoming export season”.
“And as a result of tariff cuts under the ChAFTA Australia’s horticultural exports will be even more competitive,” he said.
Assistant Agriculture and Water Resources Minister Anne Ruston said China was one of Australia's most important trading partners and the new protocols represented welcome news for the nation’s $9 billion horticulture industry “as a whole”.
“The agreements will also see improvements to the existing conditions for Australian cherries, citrus and table grapes, to provide better access for Australian exporters,” she said.
“Exports of cherries, citrus and table grapes to China were worth over $230m in 2016-17.
“The improvements in the protocols for these products will allow Australian producers and exporters to take advantage of the improved conditions to export more fruit to China in the upcoming season.
“This will not only benefit our farmers and economy, but will also ensure Chinese consumers continue to have access to the high-quality and safe produce that Australia is known for.”
Mr Hartsuyker said the agreement would also support further expansion of Australia’s grain, fodder and stock feed trade with China with other important market access outcomes, including lifting the compliance-based suspension on two Australian barley exporters.
He said China was Australia’s largest grains export market, with exports worth $1.6b in 2016 and a particularly important market for Australian wheat, barley and sorghum.
“We are now looking to work closely with China to negotiate protocols for other plant-based stock feeds, in particular for lucerne hay,” he said.
“Opening and improving agricultural market access is a priority for the Coalition Government, as exports underpin the profitability of our agriculture sector and support valuable farmgate returns.”
Cherry Growers Australia has projected exports to China could grow by as much as $50m in future years and Summerfruit Australia expect similar growth.
The Australian Table Grape Association projects exports to increase by up to $100 million.
The revised conditions for cherries, citrus and table grapes include recognition of Australia’s fruit fly pest-free areas and improved and more commercially-viable pre-export treatments.
- China is the world's second largest agricultural importer (after the USA), with imports worth over US$120b.
- In 2016, Australia exported over 3 million feeder, slaughter and breeder livestock to the world, including approximately 1 million feeder and slaughter cattle exported to 16 markets.
- Over 94,000 breeder cattle and almost 6,400 breeder sheep were exported to China in 2016.
- Australian horticulture exports to China were worth over $200 million in 2016.
- The tariff on all horticulture (except citrus) exports to China will be eliminated by January 1, 2019 and the tariff on citrus exports to China will be eliminated by January 1, 2023.
- In 2016, barley exports were worth $929m, up 227pc since 2010, while sorghum exports were worth $220m and Australian oaten hay exports to China were valued at $95m in 2016-17.
- In 2016, Australian beef exports to China totalled 98,440 tonnes, worth $670.4m.
- Australia is already one of China’s major beef suppliers with 22pc of the import market.
- China is Australia’s largest market for dairy exports with $783m worth of produce exported in 2016.
- Under the ChAFTA, tariffs of up to 25pc on beef will be eliminated by January 1, 2024 and tariffs of up to 23pc on sheepmeat will be eliminated by January 1, 2023.