Michael Growder Department of Foreign Affairs and Trade. Brett Hughes Department of Agriculture and Water Resources
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2 Michael Growder Department of Foreign Affairs and Trade Brett Hughes Department of Agriculture and Water Resources
3 WHAT IS AN FTA? A Free Trade Agreement is an international treaty that eliminates or reduces cross-border barriers to trade and investment. Free Trade Agreements 3
4 NORTH ASIA: LEADING MARKETS FOR AUSTRALIA 56% OF AUSTRALIA'S MERCHANDISE EXPORTS 21% OF AUSTRALIA'S SERVICES EXPORTS 38% OF AUSTRALIA'S TOTAL TRADE $256b combined ABS 2015 trade data
5 Agricultural Trade with North Asia China, Japan and Korea are Australia s first, third and sixth largest markets for agriculture, fisheries and forestry exports. China is our largest agricultural export market worth $10.1 billion in Japan is our third largest market worth $4.8 billion in Korea is our sixth largest market worth $2.9 billion in $17.8b Combined 37% OF TOTAL AGRICULTURE, FISHERIES AND FORESTRY EXPORTS Free Trade Agreements
6 FTAs MEAN BENEFITS FOR BUSINESS THROUGH REMOVAL OF TARIFFS KAFTA JAEPA ChAFTA 99.7% 99.5% 97.9% of goods exports will enter these three markets with preferential or duty-free access on full implementation Free Trade Agreements 6
7 WHAT DO FTAs DO? They give preferential access into North Asia for Australian agriculture meaning? It means your products are more competitively priced in key markets, opening up the chance for expanded sales or new customers Free Trade Agreements
8 KAFTA outcomes in agriculture 40% Korean tariff on beef cut three times since 2014, to 32% currently and will be cut again in early 2017 to 29.3% Free Trade Agreements
9 KAFTA outcomes in agriculture export of fresh boneless beef Australian exports of chilled beef to Korea $m; Jan-Jun period; 2014, 2015 and 2016 KAFTA in force Jan-Jun14 level Jan-Jun15 level Jan-Jun16 level Free Trade Agreements 9
10 JAEPA outcomes in agriculture JAEPA cut the seasonal tariff (November to February) on table grapes from 7.8% to 4.9% in Apr 2016 and will cut again to 3.9% in Apr 2017 Free Trade Agreements 10
11 JAEPA outcomes in agriculture fresh table grapes Australian exports of fresh table grapes to Japan $m; Jan-Jun period; 2014, 2015 and 2016 JAEPA in force Jan-Jun14 level Jan-Jun15 level Jan-Jun16 level Free Trade Agreements 11
12 ChAFTA outcomes in agriculture 10% Chinese tariff on powdered milk has already been reduced to 8.3% next reduction to occur on 1 January 2017, to 7.5% Free Trade Agreements
13 ChAFTA outcomes in agriculture milk powder to China Exports have more than doubled, to $118 million, in the first half of Australian milk powder exports to China $m; Jan-Jun period; 2015 and 2016 Jan-Jun15 level ChAFTA in force Jan-Jun16 level Free Trade Agreements 13
14 ChAFTA outcomes in beverages 14% Chinese tariff on bottled wine already cut to 8.6% and will be cut again to 5.6% on 1 Jan 2017 Free Trade Agreements 14
15 ChAFTA outcomes in beverages export of bottled wine Australian bottled wine exports to China $m; Jan-Jun period; 2015 and 2016 ChAFTA in force Jan-Jun15 level Jan-Jun16 level Free Trade Agreements 15
16 ChAFTA outcomes in seafood Chinese tariff on rock lobster already cut to 9% and will be cut again to 6% on 1 Jan 2017 Free Trade Agreements 16
17 ChAFTA outcomes in seafood rock lobster Australian rock lobster exports to China $m; Jan-Jun period; 2015 and 2016 ChAFTA in force Jan-Jun15 level Jan-Jun16 level Free Trade Agreements 17
18 Overall Giant big Australian products on sale now sign across major markets of north Asia Australia already has an excellent image for quality of produce and services These FTAs together give us an edge unmatched by any other major developed country in the world, into north Asian markets, in that we combine quality goods with competitive pricing. Export opportunity significant, if industry can over time scale up productive capacity to meet potential demand Free Trade Agreements
19 Important item to note The preferential tariff outcomes from FTAs DO NOT OCCUR AUTOMATICALLY Exporters and producers need to do something different from business as usual, as it was prior to these FTAs. Free Trade Agreements 19
20 USING THE FTAs PROVING AUSTRALIAN ORIGIN? 1WHAT ARE YOU EXPORTING Determine the applicable HS (tariff) Code HOW ARE YOUR GOODS TREATED Use the HS (tariff) code to identify the tariff rate MEETING THE RULES OF ORIGIN Does your product meet criteria for Australian origin. CERTIFYING ORIGIN Certify your goods with a Certificate/ Declaration of Origin Free Trade Agreements 20
21 WHAT AN FTA CERTIFICATE OF ORIGIN LOOKS LIKE Free Trade Agreements
22 FTAs GIVE YOU AN EDGE BUT DON T REWRITE THE RULES OF THE (TRADE) GAME Free Trade Agreements
23 Non-tariff measures As noted: FTAs do not address quarantine, technical standards and other importing country requirements that are science based. Australian agricultural exporters face a range of non-tariff issues: quarantine and inspection requirements labelling or other product standards requirements food safety and residue requirements Customs arrangements and taxes Changes in e-commerce regulations. Free Trade Agreements 23
24 Be Export Ready: Meeting importing country requirements Industries must position themselves to take up these new opportunities be export ready, understand the market, have a strong business case and comply with importing country requirements. Exporters must comply with legitimate importing country requirements before exporting agriculture products. Commercial compliance with product integrity, safety and quarantine conditions is critical to trade. These include (but not limited to) export establishment registration, complying with inspection procedures, and providing all required export documentation such as health certificates and import permits. Failure to meet these will damage the exporter, and Australia s reputation in the market. Free Trade Agreements 24
25 What can the Department of Agriculture and Water Resources do to help? The Department of Agriculture and Water Resources provides advice and assistance to existing and potential exporters of agricultural and fisheries produce on the following: Technical market access negotiations Import conditions of destination countries Australian export legislation requirements Export documentation, including export permits, health and phytosanitary certificates, quality assurance arrangements Premises registration requirements Inspection procedures The Department of Agriculture and Water Resources Manual of Importing Country Requirements (MICoR) provides details of requirements that must be met before products and commodities can be accepted for import into specific overseas countries. Free Trade Agreements 25
26 What can the Department of Agriculture and Water Resources do to help? ACACA The Australia China Agricultural Cooperation Agreement (ACACA) programme is an ongoing, competitive programme, with funding rounds every two calendar years, designed to develop Australia s agricultural trading relationship with China. The second call for applications for funding during 2017 will be announced in late ( ATMAC Grants to help open, improve and maintain premium markets Agricultural Trade and Market Access Cooperation programme (ATMAC) ( Free Trade Agreements 26
27 What can the Department of Agriculture and Water Resources do to help? Free Trade Agreements 27
28 AUSTRADE NORTH ASIA Shenyang Sapporo Chengdu Beijing Qingdao Nanjing Wuhan Shanghai Seoul Fukuoka Tokyo Osaka Kunming Guangzhou Shenzhen Hong Kong Austrade Post Austrade Sub-Post Free Trade Agreements
29 HOW AUSTRADE ASSISTS - TRADE Link Australian capability to market opportunity Provide practical advice and market intelligence Assist with market entry we connect buyers and sellers Promote Brand Australia capability in overseas markets Free Trade Agreements
30 GOVERNMENT ASSISTANCE FOR TRADE - Austrade Export Market Development Grant (EMDG): reimburses up to 50% of eligible export promotion expenses above $5,000, provided that the total expenses are at least $15,000 provides up to 8 grants to each eligible applicant. Export advice and promotion: Trade advisers including 20 TradeStart offices in regional locations Australian Suppliers Directory free online directory on Austrade s website to promote Australian products and services to overseas buyers.
31 GOVERNMENT ASSISTANCE FOR TRADE Export Finance and Insurance Corporation (EFIC) Efic supports Australian businesses: operates on a commercial basis and partners with banks to provide financial solutions for Australian SME exporters can assist with access to additional working capital, a bond or guarantee to secure a contract, or finance to establish an overseas direct investment Can fill the gap where commercial banks might not go.
32 FINDING YOUR TARIFFS - Free Trade Agreements
33 FTAs - GUIDANCE AND INFORMATION AVAILABLE Free Trade Agreements
34 A BUSY FORWARD NEGOTIATING AGENDA 34
35 Wrapping up These FTAs are for you! Free Trade Agreements 35
36 YOUR NEXT STEP - USE THE ASSISTANCE AVAILABLE Austrade EFIC DFAT DAWR Austrade on Austrade s website AusIndustry on EFIC on KoreaFTA@dfat.gov.au JapanEPA@dfat.gov.au ChinaFTA@dfat.gov.au FTA Hotline: agriculture.gov.au/export/ Call Tradestart Network
Michael Growder. Assistant Secretary Free Trade Agreement Division Department of Foreign Affairs and Trade
Michael Growder Assistant Secretary Free Trade Agreement Division Department of Foreign Affairs and Trade NORTH ASIA: LEADING MARKETS FOR AUSTRALIA 60% OF AUSTRALIA'S MERCHANDISE EXPORTS 20% OF AUSTRALIA'S
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