Agribusiness & Food

TPP deal a boon for Australian agribusinesses

Queensland’s sugar mills have produced more than two million tonnes of raw sugar this season, according to the Australian Sugar Milling Council (ASMC).

Australia’s sugar industry has welcomed the signing of the Trans-Pacific Partnership free trade deal, but has expressed concern the US sugar industry remains relatively protected.

The TPP, a trade agreement between 12 economies adjoining the Pacific ocean, is set to remove 98% of tariffs on Australian exports to the United States, Canada, Japan, Mexico, Peru, Malaysia, Vietnam, Brunei, Chile, Singapore and New Zealand.

The deal will allow Australian sugar exporters to ship an additional 65,000 tonnes of sugar a year to the US, boosting total average annual sugar exports from Australia to the US by a third to over 207,000 tonnes.

“Overall, this agreement is a net positive result for the Australian sugar industry,” Australian Sugar Milling Council boss Dominic Nolan told Dow Jones.

But Nolan admitted he had hoped for more.

“We certainly were pushing for a substantially better result from the US market, and are very disappointed the base access to the US market is so limited.”

He said a great deal of uncertainty remains over the 23% share Australian sugar producers are set to receive of any additional quota allocations into the US.

“According to USDA figures this could be as high as an additional 300,000 tonnes on top of the 152,000 tonnes by 2025,” he said. “However, this is completely unpredictable year on year, and does not allow long-term business relationships to develop based on certainty and consistency.

“The other unknown is the supply of sugar from Mexico each year. Mexico has the first option for supplying the sugar. So there is a great deal of uncertainty as to what the 23% allocation of additional annual quota actually means commercially for Australian sugar.”

Nolan blamed the “protectionist US sugar lobby” for successfully ensuring access remained limited to a market with an estimated 4 million tonne shortfall in 2016.

Elsewhere, National Farmers’ Federation president Brent Finlay called the agreement “incredible,” and “historical”.

“Reduced tariffs and greater certainty on rules means more market opportunities and more investment and this means more jobs and growth in regional centres,” Finlay told Dow Jones.

Export Council of Australia chief executive Lisa McAuley praised the signing of the deal, saying Australia’s ongoing pursuit of trade liberalisation is to be commended as it helps facilitate greater trade and investment flows.

“This is vital to the Australian economy as trade is a key driver of jobs, innovation and long term prosperity,” McAuley stated.

“By creating commonly agreed rules to trade in goods and services and promoting transparency, the TPP opens up new trade and investment opportunities for Australian businesses in the region, which is a key driver of global economic growth.”

The nations who are parties to the TPP Agreement comprise 11.2% of the world’s population, 25.5% of total world trade, and approximately 70% of Australia’s trade flows through the Asia-Pacific region.

Five of the other eleven parties in the TPP were among Australia’s top 10 trading partners for goods and services in 2013/14.

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