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Farmers eye new trade opportunities in Latin America
Australian farmers may soon have enhanced access to Latin American markets after the Federal Government announced the beginning of free trade talks with Mexico, Chile, Peru and Colombia on the weekend.
When grouped together as a bloc – referred to as the Pacific Alliance – the four countries account for 38 per cent of Latin America’s population and 57% of its total imports.
Speaking from Colombia on Saturday, Trade Minister Steve Ciobo said the Pacific Alliance nations represented significant opportunity for Australian farm exports.
“Pacific Alliance members imported goods and services worth more than USD $600 billion in 2016.
“Mexico alone has a population of 127 million people and a gross domestic product in excess of $1 trillion.”
Minister Ciobo said until now Australia’s ability to capitalise on this demand had been limited by high tariffs.
“Australian beef faces tariffs of up to 80% in the region. Dairy products attract tariffs of up to 45% and sugar more than 30%.
“A Pacific Alliance free trade agreement (FTA) would bring down tariff barriers and ensure Australian businesses have competitive access.”
“It simply has not been economical for Australia to export large quantities of produce to the region.”
“In 2016, Australian exports to Pacific Alliance nations totalled about $1.8 billion, accounting for only 0.2% of the region’s imports.
“Meanwhile, our competitors, including the United States, Canada and the European Union, have enjoyed preferential access as a result of FTAs forged with the four countries,” Ms Simson said.
The national body representing grain farmers, Grain Growers Limited provided an example of just how valuable enhanced access to the region would be.
“Australian grain already has a small presence in the region, mostly driven by oat exports to Mexico,” Trade and Economics Manager, Luke Mathews said.
“But even our modest presence in this large market is worth on average $23.5 million a year.
“Pacific Alliance grain consumption exceeds 84 million tonnes a year and is growing at nearly 4.5% per annum, driven by strong population growth (currently 224 million and rising) and changing diets,” Mr Mathews said.
We compete in an ultra-price-sensitive global market
Fiona Simson, President, National Farmers' Federation
Ms Simson a Liverpool Plains beef, cotton and grain farmer, said Australian agriculture depended on preferential access to key export markets.
“Three quarters of what we produce is exported. We compete in an ultra-price-sensitive global market against nations that often have significantly lower costs of production and often subsidise their producers to boot.”
“Today’s news means, that, hopefully, in the not too distant future, our Latin American counterparts will be enjoying much more Aussie meat, dairy, sugar, grain, fruit and vegetables and fibre.”