As the farm sector celebrates the long awaited breakthrough on a free trade agreement with India, a sober reality about our global FTAs is also hitting home - they're losing their competitive edge.
Despite Australia having 16 FTA relationships with trade partners around the world, research from the Australian Bureau of Agricultural and Resource Economics and Sciences has highlighted how our export rivals are also picking the low hanging fruit from bilateral trade deals so they can catch up with us.
For example, Canada has chewed into our wheat market gains, notably in Vietnam, where Australia had seven years of preferential tariff-free arrangements ahead of the Canadians, as well as a raft of other big wheat producers including Argentina, Kazakhstan, Russia, the US and European Union.
EU grain exports to Vietnam will also soon be on the same tariff-free footing as Australia.
Our beef sales to Japan lost their tariff advantages over the US and Canada after Japan's trade deal with the US was signed two years ago, while Canadian beef gained equal footing after the Trans-Pacific Partnership deal.
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ABARES executive director, Jared Greenville, said since Australia's first tariff-slashing trade deal was signed with New Zealand in 1983, our laborious efforts to dissolve stubborn tariff barriers overseas had delivered huge benefits to the farm sector, which exports 70 per cent of its production.
However, to retain those benefits and to keep fostering new trade relationships, new ways now had to be found to gain a fresh competitive advantage.
The latest ABARES analysis of agricultural trade was a clear reminder that "we need to think about all avenues to improve our trade advantages and not get complacent".
Where to now?
Dr Greenville said the next steps to keep a competitive edge may range from improving the efficiency of biosecurity processes for exported agricultural products and cutting compliance costs, to developing and promoting more sustainable farmland stewardship credentials and encouraging greater productivity from players across the export chain, including farmers.
To save time, cold treatment and fumigation processes which ensured Australian products complied with importers phytosanitary rules might be undertaken and closely monitored in transit, rather than before or after they were shipped.
More efficient, updated technology systems to verify importers' requirements would save time, paperwork and export costs.
Also critical was refining and proactively protecting Australia's own borders from biosecurity threats like African Swine Fever, the lumpy skin disease virus and other airborne threats which could devastate our export credibility if they infected livestock and crops.
"We need to cleverly build on the investment Australia has already made, refining our export achievements rather than taking for granted the advantages free trade agreements have delivered," Dr Greenville said.
Savvy trade rivals
He noted how, contrary to what many may expect, South American exporters had been "quite active at being able to gain market access and meet import requirements".
Some had actively identified priority areas and doubled down their efforts to have the right resources in place to win credibility with export consumers.
As an example, Australia's premium market for cherries in South Korea had to contend with Chile, a low cost exporter, which managed to match our biosecurity standards and win market share before further improvements to our fumigation controls led to an Australian export resurgence.
Dr Greenville said Australian agriculture needed to remember it was not the world's only exporter claiming to be "clean and green".
We need to pivot to further increase our product quality and land management sustainability to adapt to climate change
- Jared Greenville, ABARES
Our appeal as a safe supplier of agricultural commodities would increasingly depend on proving our farming and supply chain systems were sustainable, with low or zero carbon emissions, and not transferring carbon footprint costs to our customers.
"We need to pivot to further increase our product quality and land management sustainability to adapt to climate change," he said.
Aside from seizing methane reduction opportunities like asparagopsis seaweed as a livestock feed, the pressure was on to continue gains made in soil management such as retaining stubble in cropping systems and reducing long term stocking rates.
About 27pc of farmers making these land use changes had begun in the past three years.
Meanwhile, farmers should be also looking at their production costs and therefore the costs overseas importers may have to carry if relying on our commodities.
"We often talk about lowering our production and export costs in Australia, but we need to review how costly it is to produce something in the first place, and whether we're producing things the overseas consumer really wants," Dr Greenville said.
Internationally, Australian trade officials also needed the resources and support to keep working to enhance global rules-based trading systems, lowering agricultural subsidies and reducing in non-tariff barriers.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
