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WTO trade reform could boost Australia, LatAm beef
SYDNEY (October 23 2002) : An end to export and production subsidies for beef would dramatically swing industry growth to the southern hemisphere, the natural home for the industry, a key Australian industry official said on Tuesday.
This would come about as beef income rose by about 10 percent in Australia and Latin American beef producing countries as subsidies to producers in less-efficient countries were eliminated, Peter Barnard general manager of marketing body Meat & Livestock Australia (MLA) told Reuters from Washington.
"Those supplying beef world-wide would naturally gravitate to the most efficient producers, and I think that those areas by and large exist in the southern hemisphere," he said.
The United States was also an efficient beef producer, but the European Union and Japan were not natural beef areas to any significant extent, he said.
Barnard was speaking in an interview after delivering an address to the Cairns Group of farm free trade leaders meeting in Santa Cruz, Bolivia, on the weekend.
He handed down a report commissioned by the five beef exporting nations, Australia, Canada, Mexico, New Zealand and the United States, which showed major international gains would flow from an end to beef export subsidies.
Australian beef producers stood to earn an extra A $220 million ($123 million) a year if beef production and export subsidies around the world were eliminated, just slightly less than 10 percent, the report showed.
South American producers would gain slightly more because they compete more directly with subsidised EU competition than Australia does, Barnard said.
North American producers would gain a little less because US and Canadian producers were not as dependent on export markets as are Australian producers.
European producers would inevitably lose from the withdrawal of government largesse.
AUSTRALIA BEEF GROWS: In contrast, higher returns for Australian producers would mean the country's beef industry, already the biggest exporter in the world and shipping around A $4 billion worth of product a year, would grow further, he said.
The report provided hard evidence for supporting the current round of trade liberalisation talks in the World Trade Organisation, Barnard said.
"Beef is one of the most highly protected agricultural industries in the world. The European Union, Japan and South Korea account for around 87 percent of total support to beef farmers," he said.
EU beef producers received most of their gross returns from government programmes rather than from the value of beef at world prices, while support to farmers in Japan and South Korea had declined slightly in the past decade but was still high, he said.
But as decision time nears in the World Trade Organisation, with Japan and the EU trying to stall progress, is there hope beef free traders will get anything like what they want?
Barnard calls the much-vaunted Uruguay Round of 1994 a failure in reducing agricultural protection, although it did place agriculture on the agenda of the WTO for the first time.
"As a result of that there's a greater determination than ever by exporting nations to get a better result this time around," he said.
"(But) its (decision-time is) not so long away," he said. An all-important draft paper on agricultural reform is due on December 12. Final rules for the round are due to be agreed by the end of March.
This will be followed by 18 months of detailed negotiations. "The Doha round is at a critical stage," Barnard said.
Courtesy Business Recorder
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