Australia’s entry into Trans Pacific Partnership and what it means for the food industry
The Trans-Pacific Partnership (TPP) has this week been finalised after negotiations began in 2010.
The TPP centers on a free trade zone between 12 countries located around the Pacific rim including Australia, the US, New Zealand, Singapore and Japan.
As an international free trade agreement, the TPP is expected to have a significant impact on the food industry with new markets set to open up for Australian manufacturers.
How the TPP affects the food industry
Food product origins
The exact details of the TPP will not be revealed until later in October 2015 however the TPP will include rules that aim to make country-of-origin labelling clearer.
Supply chain details must also be recorded if major product alteration occurs in other countries.
Whilst the TPP was under negotiation a spokesperson for Australian Trade Minister Andrew Robb also stated that countries involved in the TPP will still have the right to make policy related to human health and safety. This was in response to concerns food producers would not be forced to reveal where products came from.
The regulations come after the Australian Federal Government recently revealed new country-of-origin labelling laws which will make food companies disclose what percentage of food ingredients come overseas.
The Australian Made Campaign has said that local companies must take advantage of the TPP and actively promote products as Australian.
“The TPP will significantly reduce trade barriers, opening up new markets for Aussie growers and manufacturers, but it is important that they make the most of the marketing opportunity presented by ‘being Aussie’,” Australian Made Campaign Chief Executive, Ian Harrison said.
“Prominent country-of-origin branding will play a key role in driving sales in the Pacific region, which has demonstrated increasing demand for Australian products and produce.”
Intellectual property is included as part of the TPP with copyright believed to be extended to 70 years.
It is also thought that countries will be able to enforce criminal and civil penalties if an individual or organisation are found guilty of breaching copyright laws or unlawfully using trademarks.
This could increase protection for companies currently victims of food counterfeiting but some have expressed concern that long copyright terms could equal big profits for some companies, but a lack of competition for consumers.
Australian sugar industry
Sugar was a key sticking point in trade negotiations with the Australian sugar industry pushing hard for access to the large US market.
The Australian Sugar Industry Alliance said in April 2015 that sugar has traditionally been regarded a sensitive topic in trade talks.
“An agreement that entrenches the status quo is not an option,” said Paul Schembri of the alliance in April 2015. “Improved access for Australian sugar must be a part of any modern agreement.”
In the end Australia is reportedly now allowed to send an extra 65 000 tonnes of sugar annually to the US. This figure is however much lower than what the industry was looking for.
CHOICE wants TPP made public
Consumer advocacy group CHOICE is calling for the Australian Federal Government to reveal details of the TPP as soon as possible and for the Productivity Commission to perform a full cost-benefit analysis.
“It’s absurd that our Trade Minister has committed Australia to a deal the Australian public has never seen, said CHOICE’s Campaigns Manager Erin Turner.
“Now the agreement has been signed in the dark, all Australians will be waiting nervously to see what the government has traded away,” Ms Turner said.
“The TPP has been described as a transformational, modern agreement that will deliver huge benefits for the citizens of nations involved. These claims have been made with no independent assessment and no cost-benefit analysis of the Agreement for Australia,” Ms Turner continued.
“Australia has no need to rush. The United States will spend months assessing this new trade deal and we should do the same.”
“We need a full cost-benefit analysis conducted by the Productivity Commission as well as a chance for genuine public consultation on the impact of the new agreement,” she said.
“CHOICE urges the Government to commit to a full cost-benefit analysis of the TPP before Australia signs on to complex new rules, governing everything from financial regulations to copyright provisions,” said Ms Turner.
“This agreement has the potential to impact every aspect of the Australian economy. It’s too big to ignore the fine print which is why we need a full and transparent assessment of its impact before signature,” she said.
Fonterra not satisfied with TPP
Under the TPP new markets will be opened up for dairy producers and tariffs will be lifted on yet to be disclosed dairy products.
New Zealand based dairy producer Fonterra has said that the TPP is a small but significant step forward for the dairy sector.
“TPP has been an enormous undertaking,” said Fonterra Chairman John Wilson. “While the dairy outcome is far from perfect, we appreciate the significant effort made by Minister Groser and his negotiators to get some gains in market access for our farmers.”
“Dairy has been very hard to resolve and New Zealand has managed to get some progress against the odds,” Wilson said. “Our team has done well to lift the deal from where it stood at the Ministerial meeting in Maui. While I am very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the US, Canada and Japan. Greater benefits will be seen in future years as tariffs on some product lines are eliminated.”
Wilson further stated that entrenched protectionism in the US dairy industry had particularly stopped the deal on dairy reaching its full potential.
China and India not included in deal
China is not part of the TPP and its Ministry of Commerce has reacted to the signing by expressing hope that it will promote other free-trade agreements and will help develop trade and investment within the Asia Pacific.
India has also been left out of the TPP and the country has not yet hinted whether it is interested in joining in the future.