Senate debates

Wednesday, 17 October 2018

Bills

Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018; In Committee

12:01 pm

Photo of Linda ReynoldsLinda Reynolds (WA, Liberal Party, Assistant Minister for Home Affairs) Share this | Hansard source

Thank you very much, Senator Patrick, for your several questions wrapped up into the one. The first one I'd like to address is that article that you were talking about. Again, I think there is a bit of danger in reading bits and pieces, so what I'd like to do, perhaps, is go through with you the risks of not ratifying quickly and wrap up some of those issues. In that context, analysis reveals Australian industries would be at immediate disadvantage if we fail to ratify the TPP-11.

In terms of the process, it will enter into force 60 days after six countries have ratified the agreement. Japan, Singapore and Mexico, as I've said previously in this place, have all ratified. New Zealand and Canada are close to ratifying. They have almost finished their own domestic processes. After ratification, New Zealand and Canada would receive an 11 per cent tariff cut for their fresh beef exports to Japan next year, giving them a tariff rate of 2.2 per cent, which is lower than our current preferential treatment under our free trade agreement with Japan. This is significant given the value of all our beef exports to Japan is over $2 billion a year. That would be giving New Zealand and Canada a significant preferential advantage over our own beef producers right here in Australia.

Senator Carr has already identified this as well in the chamber, but I'm very happy to keep going through this with you. It is not only the beef industry. The New Zealand wine industry would gain an edge over our own domestic industry. The Canadian wine industry, which is growing, would also have significant advantages with the elimination of Canada's tariff, which on wine is currently 4.68c a litre, upon entering into force of the TPP. Again, that's a significant disadvantage to us potentially, because our wine exports to Canada were valued at nearly $200 million last financial year.

We've got beef, we've got wine and we've also got dairy. Under the Japanese free trade agreement the tariff rates on our cheddar cheese exports into Japan currently sit at nearly 30 per cent. On ratification of the TPP-11 New Zealand and Canada would have their tariff rates immediately cut to 27.9 per cent, obviously less than ours. Again, that gives them a competitive advantage over our dairy producers, because Australia's tariff rate would continue to remain at nearly 30 per cent.

We've got beef, we've got wine and we've got dairy. Also, Australian exports of iron and steel to Vietnam are currently worth $146 million a year. If Australia is not amongst the first six countries in the TPP-11 and Vietnam is, then Australian iron ore and steel exporters will be at a significant disadvantage to their Japanese steelmaking competitors—

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