It’s a new year, and with it comes fresh perspective as we look back on the events of the past twelve months. Trade continues to be a centrepiece of discussion, and for good reason.
Until recently, the world economy experienced decades of increasingly open markets with little interruption. This trend has been undermined by recent developments, particularly in 2018 when American president Donald Trump made rash decisions threatening global trade, such as raising tariffs and pulling out of the then TPP, now the TPP11 or CPTPP (Comprehensive and Progressive Agreement for the Trans-Pacific Partnership).
Other economies have adopted protectionist measures of their own in response to international uncertainty, provoking knee-jerk reactions elsewhere (including the United States). The World Trade Organisation has also faltered in it’s role as trade regulator, failing to keep pace with current trends. While much of the tension seems to have eased in recent months, it is clear that markets have entered a new and unpredictable era.
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
Sometimes it can be easy to forget the numerous benefits of global trade, to fail to see how far we’ve come. Looking back to history, in the years leading up to and into the Great Depression, the proliferation of tariffs and the inevitable trade wars that follow, demonstrate that there are no clear winners in its wake. A reduction in free trade and the invaluable infrastructure that underpins it would cause significant hardship to the Aussie red meat industry and to all export-dominated sectors as a whole.
Trade liberalisation continues to be a significant contributor to Australia’s world-class living standards. In the red meat industry, well over half of production is exported to more than 100 different countries, which generated $10.7 billion in revenue in 2017. Roughly 20% of Australian jobs are trade-dependent, with the figure for red meat estimated to be much higher. Additionally, free and open trade provides economic opportunity to those outside urban areas where jobs can be scarce. In Australia, 9 out of 10 meat and livestock industry employees reside in rural and regional areas, with a total workforce (direct and indirect employment) of over 438,000.
Even as Australian red meat permeates every corner of the globe, expansion into new markets and closer integration with current trading partners has only grown in importance. Free trade agreements (FTA’s) have allowed Australian producers to expand their business abroad. This has stimulated both competition and innovation, opening the door to further economic growth and prosperity for all players. With the recent implementation of the CPTPP, Australian exporters will see greater market access and dramatic tariff reduction between its trading partners in Asia and the Americas in years to come. This is a giant step in the right direction.
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
Market diversification has also played a major role in the scope of Australia’s export prowess. Over the course of the last decade, our country has made substantial progress in diversifying both products and destinations for export. Thanks to a suite of new trade agreements – including recent bilateral treaties with India and Indonesia, we have reduced our exposure on big trading partners and made our country more economically resilient. From 2007 to 2017, Australia’s red meat export volume to its top three markets dropped from 72% to 55% while total export volume continued to grow. This strategy has bolstered Aussie global competitiveness, cut supply chain costs, and opened up preferential access to key trade destinations. With solid momentum, Australia is on a positive trajectory to build upon the foundation of its success.
In spite of recent challenges such as Trump’s negative stance towards trade and protectionist policies, the Australian red meat industry is beginning the new year on a strong footing. The people of our nation recognise the value of global trade to our prosperity and welcome further market diversification and everyone-wins agreements such as the CPTPP. It is beneficial for every member of our industry, and all who rely on global trade for their livelihood, to remain aware of current international events and trade’s increasingly important role in our industry in order to better serve our customers and maintain the strength and relevance of our business.
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
Ad - For the best custom Feed Pellets contact Vic Feeds and get your Cattle, Sheep and Lambs into the heavy pen - Ad
From producers to suppliers, government to consumers, communication across the value chain is vital. All stakeholders in the Aussie red meat industry are here to support each other and to ensure that we continue to thrive. As an industry we have much to be proud of, from our way of life to our crucial role in the world economy, to our remarkable progress in 2018. We have a bright future together.
Let’s make 2019 another incredible year for Australian red meat!
Share Ag News Via