Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I too rise to make a contribution in this debate on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 and the related bill.

Mr Acting Deputy President Bernardi, I might have mentioned to you previously that the Senate is a wonderful place and you come across information, which in the normal course of your life you would never, ever stumble across. I thank the Parliamentary Library as they are always a source of incredibly pertinent and succinct information.

The total value of Australian exports to Japan in 2013 was $47,501 billion; imports from Japan—$18,914 billion—so total trade, exports and imports, is around $67 billion. That is a significant figure from my perspective and, I suppose, for any elector in the street, it is a significant amount of money. It is instructive to note that, of Japan's principal destinations, we only rank at No. 10—we are 2.4 per cent of Japan's principal export destination; however, of principal import destinations, we are in the top three—it is China, United States and then Australia.

This is a critically important piece of treaty making, if you like, for the economic welfare of this country. As a member of the Foreign Affairs, Defence and Trade Legislation Committee, we sought some submissions in respect of the making of this treaty and the passing of the enabling legislation. I put the caveat up front that I am going to quote selectively from a group of people who made submissions. It is not my intent to alter their support or general goodwill towards the making of this treaty; it is for a specific purpose, which I will get to in the latter part of my contribution.

We go to the Australian Lot Feeders' Association. They say:

The JAEPA promises to deliver significant tariff reduction gains to the Australian beef industry in what is our largest export market. Under the JAEPA, the tariffs on frozen Australian beef entering Japan will drop from 38.5% to 19.5% over 18 years (with an 8% cut on entry into force (EIF)), while the tariffs for chilled beef will fall from 38.5% to 23.5% over 15 years—including a 6% cut on EIF.

Whilst falling short of the beef industry’s tariff elimination objective, modelling suggests that the tariff reductions will benefit Australian beef export sales by around $5.5 billion over 20 years and annual gross value of Australian beef production by up to 7%.

These are not small figures. The interesting thing is: why would country put a tariff on protein?

Fortunately, I had the opportunity to visit Japan and Korea last month. When that question was put to our ambassador, he simply said they have a recent history of famine in this country. There are still people around who can remember not having enough food, so food security is extremely important to them. They want to grow food or produce beef in their country. It is a particular type of beef for their palate, and they do not want to have to import all their food. That was particularly instructive for me, because I could not understand why you would pay $35 a kilo for beef when you can probably get it a lot cheaper. The second point is that farmers in Japan are a very powerful lobby group. In particular, members of the Diet will be more stringent and protective than some elements of our parliament here in respect of that. I respect that, so it was an instructive visit.

The Cattle Council said:

While the objective of total tariff elimination was not met, under the JAEPA there are significant tariff reductions which will have positive implications for the Australian beef industry.

Once again, the economic modelling takes it up to $5.5 billion over 20 years, despite the fact we will still have significant tariffs.

Senator Ludwig mentioned Australia Pork. They say:

APL welcomes the outcome for Australia's pork producers through the reduction (within quota) of the ad-valorem tariff on all fresh, chilled and frozen pork lines and Australia's exemption from Japan's global gate price safeguard.

However, APL questions the need for an arbitrary quota of 14, 000 tonnes when there has been no application of tonnage restrictions to date. Moreover, with recent annual Australian exports to Japan only a fraction of this quota, pork exports from Australia to Japan pose no threat to the profitability of Japanese pork producers. Given the JAEPA has already been signed, APL seeks that the Australian Government requests the abolition of the quota following the conclusion of the implementation period.

It goes on.

Very close to Senator Edwards and my hearts is the Australian wine industry, because we know—I don't think we will get any interjections or contention—that South Australia produces the best wine in Australia and, arguably, some of the best wine in the world.