Politics aside, Australia has a problem. The Hon Dr Sharman Stone MP, Federal Member for Murray, wrote an Op-Ed today speaking about the state of Australia’s FTA which remain unsigned with our major producers trading partners. We as a nation are doing ourselves a disservice by leaving near-completed negotiations unresolved. So close and yet so far.
In April 2011, during the ‘Year of Friendship’ between Australia and South Korea, Prime Minister Julia Gillard and President Lee Myung Bak both affirmed their commitment to signing the FTA between our two countries before the end of that year. To date, 15 months later, there has been no action. No information. Nothing.
Here is what Sharman Stone had to say in her Op-Ed:
The free trade agreements (FTAs) with our major trading partners, including China, Japan and South Korea, languish unsigned. Australia is therefore losing the race in its key food export markets.
A recently signed FTA between New Zealand and China has seen China’s importance to New Zealand as an agricultural trading partner jump from 12th to 2nd in 4 years. In a recent announcement, Australia will see lower tariffs for one product, infant milk formula entering China, but our wines, honey, meats and other dairy products simply can’t compete.
The Department of Foreign Affairs & Trade is so under resourced and unskilled in its negotiations with our key trading partners that the signing of key new FTAs is not expected any time soon.
Australia’s major competitor in the South Korean beef market is the United States. The FTA between the US and South Korea means US beef will soon enter that country tariff free. Australia’s beef tariffs remain a crippling 40%.
The Cattle Council of Australia is rightly alarmed. They know that without an FTA, Australia will lose the biggest share of one of our most valuable beef export markets. With the live cattle exports to Indonesia now seriously damaged by the Gillard Government’s mismanagement, the squeezing of other beef markets for Australia has serious consequences.
As part of a government foreign affairs & trade delegation to South Korea last year, I was very concerned to hear that our FTA was in stalemate, amongst other things over the issue of Investor State Dispute Settlement mechanisms. This same issue caused grief during our FTA negotiations with the USA, but it was resolved. Obviously urgent resolution is now required with this key Australian trading partner.
Tomorrow, in Seoul I will be attending a meeting to discuss the value of Australia’s FTA with Korea with a number of keynote speakers, including Jock Laurie, President of the National Farmers Federation.
Last election, much of the debate of policy focused on domestic issues, which is understandable. In light of the recent publication of the Australian Government White Paper, Australia in the Asian Century, ought we not to expect some discussion about policy that will prepare Australia to become more competitive with our trading partners in the decade ahead?
I’ll post another blog after the meeting tomorrow with some thoughts about whether we might expect any movement with FTA negotiations between now and September when the Federal Election has been called.