7 October, 2015
Agribusiness
The signing of the TPP is an important development for the agriculture and agribusiness industries in the Asia Pacific region. Given the political sensitivities for negotiating states in respect of the agriculture sector, agriculture was a key focus of the negotiations and a potential roadblock to the signing of the TPP. As it was, a number of significant issues were not resolved until very late in the negotiations. Notwithstanding these issues, the TPP represents a significant move towards trade liberalisation for key agricultural commodities across the Asia Pacific region and opens up exciting opportunities for those involved in the agricultural and agribusiness sectors.
While the text of the formal agreement has not yet been released, a summary of some key developments reported to date includes the following:
- the elimination of 98% of all tariffs for the export of Australian beef, dairy, wine, sugar, rice and horticulture,
- the elimination of all tariffs on the import of Australian beef into Canada and Mexico over the next decade, a reduction in tariffs on the import of Australian beef into Japan (beyond that achieved under the Japan-Australia FTA negotiated in 2014) and the removal of key restrictions on the import of US beef into the US contained in the US-Australia FTA,
- increased access for Australian milk and cheese products into the US and Japan,
- increased access for Australian rice to Japan and Mexico, and
- improved access for Australian sugar into the US (although the increased quota fall short of what the sugar industry were hoping for).
In addition to the elimination or reduction of tariffs, the parties to the TPP have also committed to removing hidden barriers to trade, including through promoting policy reform and the removal of other restrictive policies. According to reports, the commitment extends to eliminating agricultural export subsidies, working together in the WTO to develop disciplines on export state trading enterprises and limiting the timeframes allowed for restrictions on food exports so as to provide greater food security in the region. The TPP parties have also agreed to increased transparency and cooperation on certain activities related to agricultural biotechnology.
For further information, please contact:
Donald Robertson, Partner, Herbert Smith Freehills
donald.robertson@hsf.com
