Non-tariff barriers constrict China ag trade

Mr Colbeck - a former Tasmanian Liberal Senator and Assistant Trade Minister and Assistant Agriculture Minister - presented a discussion paper at a recent dialogue in Beijing and Shanghai on trade reform, between China and Australia.

He was a guest of the Australia-China Relations Institute at the University of Technology Sydney - of which former NSW Premier and one-time Foreign Minister Bob Carr is a director - on a tour also hosted by another big picture international think-tank; the China Academy of International Trade and Economic Cooperation.

Mr Colbeck was not re-elected at last year’s double dissolution election but held the assistant trade role in the first Turnbull government ministry and was previously a long-serving Assistant Agriculture Minister and also held the shadow’s role in opposition.

In his China presentation, he said the China-Australia Free Trade Agreement (ChAFTA) - that came into force in December 2015 - represented one of the most significant advances in trade between the two countries in many decades and was the most comprehensive agreement China had negotiated with a developed economy.

But Mr Colbeck said while ChAFTA provided the core framework for trade in goods and services, including specifically tariff rates and customs requirements, it didn’t mean automatic entry for specific products, commodities or services.

He said other technical market access issues remained in place as trade barriers that needed to be negotiated over and above core tariff and customs requirements.

“For goods and services that have been traded for some time between China and Australia and already have those technical market access issues negotiated and resolved, there have been some notable success stories in market growth since the signing of ChAFTA,” he said.

“Commodities that have been the foundation of the trading relationship for decades continue to perform well in the market.

“In food and agriculture however, while there have been a few spectacular stars, growth rates have been constrained by supply and technical market access.”

Mr Colbeck said the “spectacular growth” of food and agricultural products in the Chinese market over the last five years to December 2016 of close to 250 per cent, was largely off the back of gaining technical market access.

He said beef, citrus, dairy, table grapes, apples, mangoes, nectarines and dried fruit, have all gained their foothold through the approval of technical market access protocols.

Subsequently, those products have improved their respective market situations through Australia’s “strong reputation” for supplying quality, safe food products and the competitive market advantage achieved from the changes in tariffs following the ratification of ChAFTA, he said.

“The genuine value to both China and Australia of ChAFTA should never be understated in its importance,” he said.

“However it doesn’t mean much to a producer supplying a product without technical market access, because they are not able to take advantage of the benefits of the market.”

Mr Colbeck said the granting of technical market access protocols in horticulture for example remained “highly transactional” between Australia and China.

He said negotiations where each country submitted a list of four commodities it wanted biosecurity clearance for, and only single approvals are granted bilaterally, made for “slow progress” in opening the market for new products.

“For other products, labelling requirements, testing and certification, harmonisation of standards and working with international standards all inhibit or slow access to the market,” he said.

But Mr Colbeck highlighted a recent visit to Australia by Chinese Premier Li Keqiang where important progress was made through the signing of an agreement on meat exports which will see China recognise all Australian eligible meat exporters.

Mr Colbeck said the deal was “an important step in recognition between the two countries of respective certification systems and removal of non-tariff barriers to trade”.

“It is significant to recognise that Australia is the only country to have this market access,” he said.

“The signing of a joint statement on enhancing inspection and quarantine cooperation and an Memorandum of Understanding between Australia’s Department of Agriculture and Water Resources and China’s Food and Drug Administration on cooperation on food safety also indicates important progresses towards the resolution of technical market access issues.

“It is clearly these areas of the trading relationship that require the continued direction of resources so that the trade in goods and services between our countries can continue to grow.”

But Mr Colbeck warned rather than trying to “beat up” the Chinese over non-tariff barriers that restrict farm trade in areas like biosecurity standards, it was better to find ways of removing them co-operatively through “win-win outcomes that benefit both trading partners”.

NSW rural Liberal MP Angus Taylor said the reduction of non-tariff barriers to complement gains made by free trade agreements remained one of the government’s most pressing priorities and was an ongoing issue that required continued attention.