This week, I'm representing the interests of the Australian dairy industry in Osaka, Japan, where free trade talks with the European Union (EU) fell over on Monday.
To be honest, the stalemate comes as a relief for Australian dairy businesses. The deal on the table from the EU was not free and it was certainly not fair for Australian agriculture.
Federal Minister for Trade and Tourism Senator Don Farrell has our complete backing for walking away from a deal that was not in the interests of Australian farmers.
No deal is better than a deal which offers no gains for Australian dairy farmers, just costs and burdens.
It remains to be seen when and how negotiations will re-start in the future. It's not likely to be anytime soon.
I've been clear about what we wanted from these meetings and that was a fair go for our dairy farmers. Australian dairy is a supporter of a free, and importantly a fair, trade deal.
Getting the best possible access to the EU and Asian markets is critical to the future profitability and competitiveness of farmers and the whole Australian dairy supply chain.
We were particularly concerned that an agreement on geographical indications (GI) as part of an Australian-EU free trade agreement (FTA) could restrict the use of common food names, including names of cheeses we commonly produce here in Australia.
I've been clear about what we wanted from these meetings and that was a fair go for our dairy farmers.
- Rick Gladigau
It is estimated the deal sought by the EU could have cost the Australian dairy industry more than $75 million per year. It would have also cost the Australian taxpayer as the onus was on our government to manage the GI regulation.
To rub salt in the wound, the deal would have provided greater access for subsidised EU products to the Australian market, without offering reciprocal access for Australian products to the EU.
This is far from fair, as is demonstrated by the greater than 70,000 tonnes of European dairy product imported to Australia every year, compared to the 500 tonnes Australia exports to the EU in-turn.
At trade meetings in Osaka, I made it clear that the future success of our industry relies on a level playing field. The market access offer from the EU was neither equitable nor reasonable.
Having these conversations in Japan is significant, as Japan was Australia's second most valuable dairy market last financial year, with 14 per cent market share.
Although volumes were down, the value of our exports to Japan rose 9.5pc year-on-year in 2022/2023, to reach $423 million.
Asian markets are consistently our top five dairy export markets. What we agreed to in our EU deal, especially around GIs, would have implications for other export markets, including Asia.
We must continue to grow our international markets. In 2022-23 Australia's share of global trade rose to 4.7pc. The target in the Australian Dairy Sustainability Framework is 10pc by 2030, so we've still got some way to go.
Global market access will continue to be a core priority, and if this means walking away from a deal that doesn't serve our interests, then that's what we should have done and we did do.
