The historic Trans Pacific Partnership Agreement (TPP) – which will see the elimination of 98% of tariffs among 12 countries – was formally signed in New Zealand by the Minister for Trade and Investment Andrew Robb – and it seems that Australian agriculture is the big winner.
“The United States Department of Agriculture … has done some extensive work and their conclusion is that with agriculture, the biggest winner by a country mile will be Australia with a 19 per cent increase by 2025, representing tens of billions of dollars of increased opportunity for Australian farmers,” Minister Robb said on Sky News.
According to the federal government, Australia’s exports of goods and services to the countries that are part of the agreement were worth $109 billion last year – a third of Australia’s total exports.
The TPP was welcomed by the Business Council of Australia, with Business Council of Australia Chief Executive Jennifer Westacott calling it the first concrete step towards realising the long-term vision of a Free Trade Area of the Asia-Pacific.
“The TPP levels the playing field for business, workers and farmers, which means more jobs, higher wages, stronger growth, a higher standard of living and new economic opportunities for Australia,” she said.
The National Farmers’ Federation (NFF) also welcomes the TPP signing, urging swift ratification.
“We are delighted by the signing of the TPP in Auckland today and recognise the collaborative and constructive efforts put in by the Federal Government and industry groups in reaching this milestone,” said NFF President, Brent Finlay.
“However, it is critical the next step is taken swiftly and that this agreement passes through each of the member country’s parliamentary processes, including here at home.
“What we need is for the clear benefits of this agreement and its potential to bolster Australia’s export opportunities and the broader economy to be recognised and for the ratification process not to be politicised and stalled.”
Signatories to the TPP
- New Zealand
- United States
Agribusiness Benefits from the TPP?
According to the National Farmers’ Federation, some key agribusiness benefits of the TPP include:
- In the red meat sector, beef tariffs will be further reduced in Japan and Mexico and will result in the elimination of price safeguards in the United States.
- Tariffs on sheep meat exports to Mexico will be eliminated in eight years and from day one of the agreement coming into effect in all other TPP countries.
- In the grains sector, the agreement will result in the creation of new quota volumes for wheat and barley exports to Japan under the simultaneous buy-sell mechanism which were worth approximately $481 million in 2014. It will also provide for new quota access for roasted malt exports, while tariffs on exports of Australian wheat and barley to Mexico will be eliminated.
- For the rice sector, the TPP results in new quota access into Japan with a new 6,000 tonne quota from entry into force, a reduction in tariffs on a number of rice preparation products, and an amendment to the WTO quota of an extra 60,000 tonnes of medium grain rice for processing use.
- The TPP will eliminate all remaining tariffs on Australian raw wool and cotton exports to TPP countries from day one of the agreement coming into effect and also deliver improved rules of origin for textiles, which will encourage greater demand for Australian fibre products.
- In the dairy sector, the TPP will improve on the Japan Australia bilateral agreement to eliminate tariffs on certain cheese products, and provide tariff reductions and new quota allocations for remaining cheese products.
- In the horticulture sector, the TPP will result in the elimination of all Canada’s horticulture tariffs and most of Mexico’s tariffs upon entry into force and most of Peru’s horticulture tariffs (currently up to 17 per cent) after 15 years.
At a breakfast Prime Minister Malcolm Turnbull described the TPP as vitally important.
“The TPP is important for the world, it’s important for our region, it’s important for America, it is critically important as a vital building block in ensuring the ongoing stability and prosperity of the Asia-Pacific, and that is the driver of the global economy today,” he said.