Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Hansard source

It is a pleasure to follow Dr Jim Chalmers, the member for Rankin, who in a past life was chief of staff to the immediate past Treasurer and who succeeded Craig Emerson in the electorate of Rankin. He acknowledged Dr Emerson's work in getting these trade agreements through, and I too acknowledge the former member's work in this regard. I will admit also that my friend the member for Rankin was Executive Director of the Chifley Research Centre after leaving Wayne Swan's office and then was preselected for Rankin. That is a bit of history for you on Dr Chalmers.

The Chifley Research Centre is replicated in the National party by the Page Research Centre, and the Page Research Centre, in conjunction with Senator Matthew Canavan—who is doing some fine work for Queensland as a Nationals senator—has republished this book in recent times, John McEwen: His Story. This relates to the legislation before the House, and it is historically important, because John McEwen helped to forge Australia's first relationship with Japan as far as trade is concerned. I will just read from this little 86-page book, about when Black Jack McEwen went to Japan and helped to forge that first relationship. He writes:

The second great international negotiation I was involved with in my first years as minister for trade was the creation of a trade treaty with Japan. The Japanese economy was discussed extensively with the trade department, between John Crawford, Alan Westerman and myself.

He writes:

The circumstances that had made Britain and Australia such big customers for each other's products were being repeated with the Japanese. In addition, under the terms of the peace treaty following World War II, Australia was obliged to make some move in favour of trade with Japan. We decided to have a go at negotiating a trade treaty with Japan. The negotiations were complicated by our obligations under the General Agreement on Tariffs and Trade.

Now, it would not have been easy for Black Jack to help forge a relationship with Japan, particularly at that time, when there was a lot of hostility—understandably—from many Australians towards the Japanese following the atrocities perpetrated on prisoners of war during the Second World War, between 1939 and 1945. There was a lot of racial intolerance towards the Japanese over what had been perpetrated on Australian soldiers, Australian nurses and Australians in general. Black Jack fought through that, realising the great potential there was in having a trade treaty with Japan—and full credit to him.

Similarly, this government has forged another trade agreement with Japan. The Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 and the Customs Tariff Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 are good pieces of legislation, and it is with pleasure that I speak on these bills. The economic partnership agreement between Japan and Australia established earlier this year by the Prime Minister and the minister for trade, Andrew Robb—who is doing a fantastic job, an absolutely fantastic job—is a groundbreaking trade deal. It will drive economic growth and continue to build and to develop stronger trading relationships in Asia.

Collectively with the Korea-Australia and China-Australia preferential trade agreements—I prefer to call them preferential trade agreements, because they are not totally free trade; if they were, rice and all these other things would be included—the Japan-Australia economic partnership agreement forms a powerful trifecta and positions Australia as a major partner to these three economies, which are powerhouse economies both in our region and globally. Indeed, the three trade agreements with South Korea, China and Japan, negotiated and concluded by the coalition government this year, are the most comprehensive trade deals ever achieved by Australia in Asia. Together these three economies represent more than half of Australia's exports. Not only will all Australians benefit from this landmark agreement with Japan but regional Australia in particular will be a substantial benefactor. I represent the seat of Riverina, which will be a winner from these trade agreements, the Japanese trade agreement in particular. Australia and Japan concluded negotiations in April this year during the Prime Minister's historic and highly successful visit to North Asia. He conclusively signed the agreement with Japanese Prime Minister Shinzo Abe during Mr Abe's visit to Australia on 8 July.

Japan is an economic heavyweight. John McEwen recognised that. Tony Abbott recognises that. Japan has a population of almost 127 million people, a rapidly growing middle class and the third-largest economy in the world, and it is our second-largest export market. This partnership agreement with Japan represents enormous new opportunities and an expansion of current trading relationships for Australian producers, farmers and exporters. This is the most ambitious trade deal Japan has concluded with any nation whatsoever. It is the first time that Japan has signed a trade deal with another major agricultural country—and it is with Australia. It is a remarkable achievement, particularly for Australian farmers, for Riverina farmers.

Australia will benefit from major concessions across a wide range of areas, most notably in agriculture but also in education. A domain of traditional sensitivity for the Japanese is agriculture. This agreement will give Australian primary producers and exporters a significant competitive advantage by expanding current access to new Japanese markets. It eliminates high tariffs on a wide range of Australian exports. It will see more than 97 per cent of Australia's exports to Japan either receive preferential access over our global competitors or enter duty free when the agreement is fully implemented. This agreement positions Australia to capitalise on providing produce and services to an exploding population across Asia, which is expected to grow from 600 million to more than three billion people within the next 15 to 20 years. This economic partnership is an important step forward in our trade relationship with Japan, but the establishment of trading agreements with South Korea and China are a significant advancement for diplomatic relationships in the wider North Asia region. Building stronger trading relationships with Japan will have profound effects on local job creation, will lead to greater market certainty and will secure a positive future for Australia's economic growth.

Australia's agriculture sector is world class. We all know that. We should be extolling the virtues of Australian agriculture at every possible step. We all should—on both sides of the House—because Australia's agriculture is the very best in the world. We produce more than we can consume at home. About two-thirds of our domestic agricultural production is exported overseas, as it needs to be. We need trade agreements. We need to help the balance of payments. To reduce the barriers we face in major agrifood markets overseas we do need these sorts of trade agreements. Our competitors in the United States of America, Canada, New Zealand and Brazil, for example, will not have the level of access that we have negotiated, that Andrew Robb has negotiated.

This is a major win for our beef producers. Under this agreement the frozen-beef tariff will be reduced from 38.5 per cent to 19.5 per cent over 18 years and that for fresh/chilled beef will go to 23.5 per cent over 15 years. This is an excellent outcome in our largest market for beef, with a trade valued at close to $1.5 billion last year. I know how much the Minister for Agriculture, Barnaby Joyce, has pushed our beef—pushed the live cattle, pushed the chilled boxed beef—at every opportunity. We are making great strides in that area. Meat and Livestock Australia forecasts that, as a result of the Japan-Australia Economic Partnership Agreement, sales will jump by $5.5 billion over the next 20 years. Importantly, unlike our competitors, Australia will never again have to face Japan's 50 per cent snapback tariff on beef.

Similarly, we have also negotiated good export outcomes on dairy, wheat, malt/barley, sugar, seafood, oilseeds, wine and a whole host of other agricultural goods. It is great news. A large number of these horticultural products are produced in the Murrumbidgee and Coleambally irrigation areas in the Riverina. I actually have some of the irrigators sitting in my parliamentary office here in Canberra now. I know that they are very excited about the prospects that these sorts of trade arrangements have for themselves, for the local producers whom they represent.

In citrus—oranges—the 16 per cent tariff faced by Australian exporters in our peak exporting season will be eliminated over 10 years under this economic partnership agreement. What great news, absolutely fantastic news, for Griffith, for Leeton, for Coleambally, for Hillston, for Narrandera, for all of those great citrus-producing areas in the Riverina!

With dairy there are new market access opportunities in a heavily regulated industry, with a complete network of World Trade Organization quotas and domestic laws and quotas controlling all aspects of production and importation. However, Japan is one of Australia's most important dairy markets and Australia is Japan's largest supplier. Our exports were valued at $452 million last year, including $372 million of cheese, which faces tariffs of up to 29.8 per cent. Under the new partnership agreement dairy exporters will be able to access a new Australia-only duty free cheese quota for natural cheese for processing, growing from 4,000 tonnes to 20,000 tonnes, and also for cheese for shredding, growing from 1,000 tonnes to 5,000 tonnes. That is good news.

For a company trying to resurrect its original 1921 locally made and handcrafted cheese-producing facilities, this agreement is just the kind of incentive, just the kind of opportunity, that Coolamon Cheese Company in my electorate, would be looking for and could potentially benefit from. The Coolamon Cheese Company is expected to open mid next year and will see the creation of 12 to 15 full-time jobs in Coolamon. That might not sound like too many to the member for Kingsford Smith, who is sitting opposite, although he has been to my area and he knows that for little towns 15 jobs is a huge number. The multiplier effect from that is massive. Coolamon Cheese Company will produce handcraft boutique cheeses under the guidance of Australia's most experienced cheesemaker, Barry Lillywhite, and will be an icon for the Riverina. I am sure the member for Kingsford Smith will enjoy some of that product when I bring it in after the factory opens mid next year.

See this speech in context