Gold Coast, 9 September 2008

Australian Meat Industry Council: 2008 Conference Opening

Thank you, Gary [Mr Gary Burridge – Chairman, Australian Processor Council].  It’s a pleasure to be here this morning to officially open the Australian Meat Industry Council’s 2008 Conference.

I congratulate the conference organisers on the impressive program they have put together for this year’s Conference. 

It reflects the truly international operating environment the Australian meat industry does business in. 

And it is an operating environment the Australian Government is helping to shape, through our trade policy, to the benefit of major export industries such as yourselves.

Australia’s size and our unique natural environment allow us to produce an abundance of excellent meat products.  Most Australians enjoy the benefits of this at dinner tables and weekend barbeques across the country.

The meat industry is at the top of our list of export earners for Australian agriculture. 

I have had a long association and commitment to Australia’s agriculture and to the meat industry.

Roger Fletcher and I were speaking recently about some of the initiatives we undertook at the time, which contributed to the industry’s long term sustainability.

The Australian meat industry – from its sophisticated herd management practices to its stringent quality control standards – has continued to make strides in ensuring Australia is well equipped to export safe, top quality meat products.

The Government has an important role to help you maintain and expand export markets and find new opportunities overseas. 

Unfortunately Australia’s export performance has been poor in the past five to six years.  Under the last government we had 72 consecutive monthly trade deficits – that’s never happened in this country before.  Net exports only contributed to growth in two of the last eleven years.

We need to turn this performance around.

Australia’s new “twin pillars” approach to trade policy is taking an integrated approach to that challenge – opening market access at the border, complemented by economic reform behind the border. 

It’s no good winning new market access opportunities for our exporters if you are not competitive or productive enough to take them up.

The Government has embarked on a whole of government approach to lifting our trade performance.  We’ve commissioned a review – the Mortimer Review, which I will be releasing in a couple of weeks, to look at policy options for helping us with our goal. 

I appreciated the AMIC submission to the Mortimer Review – which made some important points about working together to improve Australia’s market access.

It argued well the need to protect Australia’s health and hygiene status – in order to protect and build on our markets overseas.  The Government has commissioned a comprehensive and wide-ranging Review on Quarantine and Biosecurity, headed by Roger Beale. 

I look forward to the outcomes of the Beale Review.  It will be important to the long-term sustainability of the Australianmeat industry that we get quarantine and biosecurity arrangements right.

I put considerable effort into quarantine measures when I was Primary Industries Minister, including to ensure AQIS was performing efficiently – because I know it matters to the success of Australian agriculture.  We are committed to getting these measures right in response to the Beale Review.

Our health and hygiene status is critical to our continued success in our overseas markets – consumers in traditional markets like Japan, Korea and the United States depend on assurances of our food safety.

I know that our ability to rapidly orient our production towards new emerging markets – like our fast growing beef exports to Russia – depends on Australia maintaining its reputation for quality and its first-class health and hygiene status.  

Our maintenance of this high quality reputation will ensure we are well placed to secure the highest returns, wherever they are available.

The AMIC submission also made crystal clear the priority the industry places on winning new market access.

With three-quarters of Australian agriculture exported, market access matters to all Australian farmers.

In our first nine months of office the Rudd Government has already put a huge effort into improving access for Australia’s meat exporters, starting with the World Trade Organization.

WTO Doha Round

The meat industry – and Australian agriculture in general – has a huge amount to gain from the Doha Round.

That’s why I’ve been concentrating my efforts on concluding the Doha Round.

You will of course know that in July despite 12 exhausting days of negotiations in Geneva we did not see a breakthrough at those talks. 

But we did get close – so close in fact that, unlike other breakdowns, we’ve been able to pull the discussions back together very quickly.

The gains to your sector from a successful conclusion would be considerable.

Already on the table are measures which would cut farm subsidy entitlements in the EU and the US by 70-80 per cent – and put strict limits on support to any particular product.

Agricultural tariffs in the EU, the US and Japan would be cut by up to 70 per cent, while tariff quotas for agriculture would be boosted to allow, in some cases, hundreds of thousands of tonnes of new market access in developed countries.

We would see substantial tariff cuts and tariff quota expansion in a range of meat products, including beef and sheep-meat into the important European market and substantial new opportunities in North Asia.

And export subsidies in agriculture would be eliminated forever.

We got agreement on 80 per cent of the negotiating agenda – but 80 per cent is not 100 per cent and we need to finish the job.

Since the talks broke down the Prime Minister and I have talked to WTO Director-General Pascal Lamy and numerous world leaders and trade ministers emphasising Australia’s commitment to concluding the Doha Round.

We are looking to build momentum to get back to the negotiating table and have pressed the relevant players for early re-engagement. 

And I’m pleased to say we are getting some strong support – including of course from our partners in the Cairns Group, with whom I am working very closely. 

We are within reach of securing the substantial gains on offer.

We need to find the right combination of technical ingenuity and political will to make it happen – and we are working hard to secure both.

Free Trade Agreement Negotiations

In the mean time, we have made very strong progress on our FTA agenda in our first nine months in office.

Just two weeks ago, we concluded negotiations for the region-wide ASEAN-Australia-New Zealand Free Trade Agreement. 

This is the largest FTA Australia has ever negotiated.  The ASEAN countries together account for 16 per cent of Australia's trade in goods and services - worth $71 billion.

As a group, ASEAN is a larger trading partner for Australia than any single country – it’s a region of 570 million people with a combined GDP of US$1 trillion.   

Most meat exports to ASEAN countries – whilst they face relatively low applied tariffs, need certainty.  Under AANZFTA these will be bound at the current low tariff on entry-into-force of the Agreement, and, in most cases, reduced or eliminated within a few years. 

Further, a number of higher tariffs faced by meat exports in some countries will also, in general, be reduced and eliminated. 

So AANZFTA will guarantee the continued access of the Australian meat industry into ASEAN markets into the future, and ensure that we can benefit from what should be a growing market for meat and meat products.

We are not stopping there.  We have strong aspirations for expanded market access for Australia’s meat and agriculture exports into a range of other markets, including the critical North Asian markets.

We are currently negotiating further FTAs with Japan, China and are holding preparatory talks with Korea about an FTA next month.

These talks with Korea follow the successful visit to Seoul by the Prime Minister last month.  We are acutely aware that we need to move to prevent erosion of beef market share once the US-Korea deal is ratified.

These North Asian markets are very significant markets for Australia – we understand they are vital to your industry’s prospects.

Japan and Korea are well known established markets for Australian meat. 

Recent Meat and Livestock Australia projections see our beef and lamb exports to China growing at double-digit rates in the next couple of years – reinforcing the need for a strong outcome in that FTA negotiation.

Australia of course also has FTA talks underway with the Gulf Cooperation Council.  We are also serious about considering negotiations with Indonesia and India and restarting talks with Malaysia.

Our active FTA agenda has already resulted in the conclusion in May of our negotiations with Chile. 

This is the most comprehensive bilateral trade agreement Australia has ever entered into.  We are aiming to have the agreement in force by January next year.  Our meat exports into Chile will be tariff-free from that 1 January 2009.

In addition to the FTA we have agreed with Chile to conclude a memorandum of understanding under which Chile will recognise the Australian Meat Industry Classification System. 

This understanding will formalise Chile’s recognition of AusMeat as the certifying body of this system, allowing Australian graders to grade meat for sale in the Chilean market.

This will significantly reduce the cost of trade to Chile, allowing industry to take full advantage of market opportunities in Chile as they arise.

Working in Partnership with Industry

The truth is that market access is about much more than tariffs, tariff quotas and subsidies. 

Increasingly it’s about a whole range of barriers behind the border – things like standards, and technical regulations, and quarantine.

To tackle barriers of this nature in our overseas markets we need to be working closely across government – and in close partnership with you, the industry.

It’s critical we have a coherent and coordinated approach – and I have asked the Mortimer Review to look at how we might improve that level of coordination across government and across federal and state levels. 

Our partnership with you is also vital – because you encounter these barriers first-hand and you understand their full complexity. 

Trade negotiations are about government-to-government relationships – but they will only be effective if we get business-to-government relationships rights.

I know AMIC supports this collaborative approach – because you made a number of useful suggestions in your submission to Mortimer as to how to strengthen that partnership. 

Initiatives such as the Red Meat Market Access Committee are critical to our ability to work together to set priorities.

My colleague Tony Burke was very pleased to be able to work closely with industry representatives during his recent visits to Korea and Indonesia, where he pursued a number of market access objectives for the Australian meat industry.

Our approach is to build the relationship with your industry into the future.

We need to be clear-sighted in our common goals, and we need to work closely together to achieve our market access objectives.

We also need think creatively and respond to the changing nature of trade. Trade is no longer simply conducted on the old “produce and ship” model.  Increasingly it’s about getting closer to your market through investment.

As the demand for beef grows strongly, the reality is that a number of our traditional markets, such as Indonesia, are investing in their own local meat and livestock industry. 

It’s important that our industry looks carefully at opportunities to invest in these emerging industries in our traditional markets.

We didn’t wait for the Mortimer Review to decide to make the necessary adjustments – in the first Rudd Government Budget we announced we would bring Invest Australia and the Global Opportunities program back into the Trade portfolio. 

And we need to help facilitate our growing engagement with the industries of other countries.  We have a role to play in contributing with capacity building – as our industry is doing with Indonesia.  We also need to work to get the investment environment right.

Our partnership needs to be strong at home, and strong on the ground in our overseas markets, where collaboration between government officials, our diplomatic representatives, and our technical experts and veterinarians is so important.

Through a coordinated and collaborative approach we will be able to tackle the barriers that impede our access to world markets – and ensure we are making the most of the opportunities we have before us.

Conclusion

What many people probably don’t realise is that among our top 10 export earners - right up there with copper and aluminium - there is just one non-resource export product.  That product is meat. 

The Australian meat industry has a long and proud history and a promising future.  Japan continues to be the dominant market but global growth fuelled by liberalised trade promises to boost demand in other markets and to present new opportunities to the industry.

The high standards you maintain as producers and processors have paved the way for this sector’s ongoing success. 

For its part, the Australian Government will contribute to this bright future through our strong support for agricultural exports and our ambitious international trade reform agenda. 

We look forward to working closely with you in this effort.

 

Media contact: Mr Crean's Office (02) 6277 7420 - Departmental (02) 6261 1555