Australian farmers will be expected to hit tightening emissions demands to continue to trade into a Southeast Asian marketplace presenting "huge opportunities for nearly every Australian farmer".
Agriculture Minister Murray Watt made the comments following closed-door meetings with foreign leaders at the Association of Southeast Asian Nations special summit in Melbourne on Tuesday.
The bloc is currently Australia's second-largest agriculture export market lagging only behind China in gross domestic product value.
However, Mr Watt said sustainability was not only an environmental consideration but also an economic imperative in "keeping producers profitable in the long term."
"A lot of Australians are aware that the EU has particularly high requirements around environmental sustainability and emissions, but certainly in meetings that I have been having at this conference, it is clear that Southeast Asia is increasing its requirements as well," he said.
"If our trading partners are expecting higher sustainability standards and reduced emissions from our agricultural production we need to meet those standards because I want to ensure these markets remain open to us in the future and if we are going to open new markets. This is a worldwide trend."
Senator Watt said Southeast Asian nations, on track to be the world's fourth biggest economy by 2040, generally regarded Australian farming practices as good by international standards.
However, he said Asian leaders had raised increased expectations around water efficiency, emissions produced during farming and the use of chemicals and "ensuring that that is made efficient over time" in the meetings.
"It is quite similar issues that we are seeing in other parts of the world as well that are increasingly of interest to Southeast Asian export markets," Mr Watt said.
Australia's two-way trade with the bloc was worth $178 billion in 2022, accounting for 15 per cent of Australia's trade, which is greater than our trade with Japan or the United States.
Currently wheat, beef, cotton, barley, malt and live cattle are cornerstones of the marketplace, but a range of other pathways are opening for other products, including nectarines, peaches, pulses and avocados.
Mr Watt said the region's growing middle class was "literally hungry for high-quality Australian produce."
"There is an enormous opportunity for us if we grab it. Southeast Asia is obviously one of our closest neighbours as a region, but we often do not appreciate the enormous economic importance it has for Australia as well as the security relationship and other facets," Mr Watt said.
"It is a very comprehensive agricultural market for us when you look at the range of commodities that we supply and there is a huge opportunity to expand the overall export figures with SE Asia."
He also said that the number of nations and diversity between them created potential markets for a broad range of Australian commodities and there were increasing opportunities in Southeast Asia for almost every Australian producer."
He also said Australia was also well-placed to leverage its reputation as a reliable and predictable supplier of good quality produce during a time of global uncertainty and challenges around supply chains.
He said further diversification into Southeast Asia had the twin benefits of providing food security for the region and helping to insulate Australian farmers from rising challenges, economic downturns and trade disruptions.
The federal government last year commissioned Special Envoy for Southeast Asia Nicholas Moore to report on trade and investment opportunities in the bloc and he identified agriculture as having tremendous opportunity.
However, he said to seize them the government must help raise awareness of the opportunities to industry, remove trade blockages, build local capacity to service the huge and growing markets and deepen Australian investments.
As part of this process, Trade Mininster Don Farrell announced the $19 million Australia Southeast Asia Business Exchange on Monday to support Australian businesses "grasp the full potential of our trade and investment relationship."
"This business exchange is all about getting boots on the ground. It's also about deepening Australian investments in Southeast Asia, and accelerating investment from our ASEAN partners right here in Australia," he said.
"He said if two-way trade growth continues at its current rate of 4.6 per cent each year, Australia's total trade will reach $400b by 2040.
"But if we can strengthen our economic relationship and achieve growth of 6.3 per cent year on year, our trade could triple - to over $530 billion by 2040. Our government believes this growth is well within reach."
The first exchange will head to Singapore and Malyasia next month.
Several SE Asian nations are members of the Cairns Group that work to reduce trade-distorting agricultural subsidies and protectionism.
Mr Watt said Australia is "quite aligned" with these nations in working towards more efficient production and not propping up inefficient production through heavy government subsidies.
However, a number of Southeast Asian countries have a level of protectionism over smaller subsistence farmers.
