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FTA needs sweetener

The Land, Australia

FTA needs sweetener

7 November 2013

By John Kehoe

Local farmers need better access to sell sugar to American businesses and consumers for Australia to quickly accept a regional free trade agreement, Trade and Investment Minister Andrew Robb has told his US counterpart.

Mr Robb visited Washington last week for high-level meetings with US political figures and companies, where he spread the message that Australia was open for business and foreign investment.

He met US Trade Representative Michael Froman, who is pursuing the Trans-Pacific Partnership, a proposed regional free trade and investment agreement among 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

On returning to Australia, Mr Robb said: "We are supportive of an ambitious agreement but this depends on other parties showing a similar level of ambition in regard to market access offers."

It is understood the Trade Minister urged the US to improve market access under the TPP for items including sugar, which is subject to high tariffs of more than 80 per cent once the total amount of sugar imports exceeds 87,000 tonnes.

If the US fails to make concessions in its highly protected agriculture sector, other partner countries will be reluctant to grant greater access to items traditionally protected, such as dairy in Canada and rice in Japan.

The US farm lobby has been very powerful in maintaining protection for the sector. The Howard government’s free trade agreement with the US in 2004 did not include better market access for sugar.

But under that FTA, two-thirds of all agricultural tariffs, including lamb, sheep meat and horticultural products were eliminated immediately.

Warren Males, head of economics at Canegrowers Australia, which represents about 80 per cent of Australia’s sugarcane growers, said it was important sugar was not omitted from the TPP.

"There is no reason why sugar can’t be included in a regional agreement for the 21st century," he said.

The TPP is an initiative of US President Barack Obama as part of his well documented "pivot" to Asia.

The US has set a goal of completing the deal by year’s end, although officials involved in the talks believe this is a highly ambitious deadline. Differences of opinion remain between participating nations over pharmaceuticals, agriculture and manufacturing.

Mr Robb said he was keen to further the investment relationship with the US, which is the biggest source of foreign direct investment in Australia.

"We need to build Australia’s reputation for ease of doing business and that means seriously reducing the regulatory burden and removing unnecessary taxes like the carbon and mining tax," Mr Robb said.

"At every opportunity I made it clear that Australia is open for business."

Mr Robb participated in the global services summit, which was attended by representatives of eBay, Google, IBM, Microsoft and major banks.

As well as Mr Froman, Mr Robb met members of Congress, Agriculture Secretary Tim Vilsack, White House Deputy National Security Adviser for International Economics Caroline Atkinson and chairman of the Senate finance committee Max Baucus.