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Beef clause in trade agreements and challenges for Australian beef industry

Trans-Pacific Partnership (TPP) negotiations continue despite criticisms of its effectiveness in providing an alternative pathway towards global economic integration. Pascal Lamy, for example, defines the TPP as “overly focussed on tariffs” (Source: iPolitics). The TPP, which consists of 12 countries including Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, has not been very explicit to the public about what is being negotiated. It is generally believed that TPP includes not only traditional trade issues such as trade in goods and services but also other areas such as medicines, intellectual property and internet. Yet, it is hard to predict the function and the outcome of the TPP if we cannot see the text.

One issue that is related to agriculture is on trade in beef.

According to the Beef Central, members of the Five Nations Beef Alliance (FNBA) from Australia, Canada, New Zealand and the United States have recently expressed their demand for TTP’s commitment to a comprehensive and non-discriminatory outcome.

For the Australian beef industry, the TPP may open opportunities for closer trade relationships with TPP members where Australian does not have trade agreements.

Australia has already had trade agreements with countries like Japan and the US.

The Japan-Australia Partnership Agreement (JAEPA) was recently agreed on 8 April 2014 cutting tariff rate for Australian beef by 19% from 38.5% (as agreed by Japan at the WTO) to 19%. Despite a decreasing trend, Japan remains to be Australia’s biggest beef export market taking about 26% of total export and Australia occupies about one-third of the Japanese beef market according to the MLA.

For Australia, a further opening of a big market like Japan not only brings opportunities but also challenges.¬† Japan’s high reliance on food imports has been accompanied by an increase in processed food consumption. Processed food now accounts about two-thirds of total food consumption in Japan. This is partly due to consumer’s changing preferences in regard to taste and convinience.¬† This phenomenan is also happening in other Asian countries.

Volatile global markets due to a combination of protectionist trade policy in importing countries, an increase production capacity of other countries and changing consumer demand should be seen by the Australian beef industry as an incentive to shift towards consumer-led industry development.

Led by Professor Christopher Findlay and Director of Global Food Studies Associate Professor Wendy Umberger, Global Food Studies’ involvement in a project called “Asian Food in Transition” defines that priority research in Asia should address topics such as consumers’ perceptions of quality attributes, the relationship between aging population and food consumption, systems to ensure the quality attributes are being monitored and traceable, etc.

In her recent talk, Professor Umberger, however, suggested that there is room for improvement in food system governance.

Within the context of exports to Japan, the Australian beef industry has addressed some of the above topics such aging populationand consumer perceptions. Its recent campaign specifically targeted to the Japanese¬† called ‘Genki’ clearly aims to capture the ‘benefits’ of consuming Australian beef. The campaign seems to be based on an intensive consumer and market research. While the impacts of such a campaign may need to be further investigated, (as any advertisements should be) it is fun and creative!

However, it is important to highlight that consumer-led industry development means that such a strategy may or may not work in other Australia’s export markets given differences in the structure of their domestic beef industry and consumer preferences as well as differences in regulatory frameworks.

 

Visit the link below to watch the video by Aussie Beef and Lamb:

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