Big reward for persistence

Is this history’s longest heavyweight contest? It took 19 rounds of negotiations over five years for the 12 participating trading nations to finalise the Trans-Pacific Partnership Agreement, and it isn’t all over yet.

While we still have to learn the real detail of the agreement it points to a winner for Australian and Tasmanian farmers (once the wording is finalised the agreement it will be posted on the Department of Foreign Affairs and Trade website, in about 30 days).

Not so many months ago we were lauding the signing of the China Australia Free Trade Agreement (CHAFTA). With China our major trading partner, the agreement is of huge significance to us, though in many instances we have to wait for some years before tariffs imposed by China on Australian agricultural imports are eliminated.

This latest agreement, the TPP, deals with Tasmania’s other major trading partners, including Japan, Malaysia and Vietnam. For our farmers, it bodes well for beef, wool and grains.

Australian farmers export goods worth about $15 billion to TPP countries, a third of total agricultural exports. In all, Australia exports about $109 billion to TPP countries.

In essence, the TPP eliminates 98 per cent of tariffs on Australian exports to those TPP countries. That is a huge incentive to trade, “a gigantic foundation stone”, as the Prime Minister puts it. It creates a free trade zone with nations accounting for 40 per cent of global GDP.

Ratification means that each nation’s legislature has to amend its own laws to comply. In Australia, the final power therefore lies with the Senate.

The US is one of the signatory nations and Congress will have to ratify the agreement. So far, it has been largely hostile towards it.

Observers say that because the TPP’s provisions cover such a wide area—as well as agricultural trade there is pharmaceuticals, investment, government procurement, telecommunications, labour rights, environmental protection and financial services—obstruction to the agreement across the 12 nations will be commonplace. There is the real prospect of a show-stopper in Japan, Canada and the US.

In Australia there is also the overall jobs factor that has dogged the Chinese free trade agreement. Already local industrial opinion is that, if anything, the union movement will be more opposed to the TPP than CHAFTA, given the sectors involved.

The federal Opposition is hedging its bets at the moment, awaiting the devil in the detail of the agreement, particularly its impact on medicines, where the US currently protects for 12 years patent-like data on new drugs derived from living organisms. Australia had been pushing for that to be reduced to five. That has been agreed but the terms have yet to be released.

So there is a lot of wait-and-see about this latest trade agreement and it is inevitable that it has many national hurdles across the spectrum of nations to overcome before it is a done deal but, for their part, Tasmanian farmers would like to see it in place to add to the suite of agreements recently negotiated and which do give us a sense of certainty about the future.

THIS ARTICLE FIRST APPEARED IN THE TAS COUNTRY ON 9TH OCTOBER 2015.
TFGA president Wayne Johnston