The Productivity Commission’s public hearing in Melbourne on October 28 will provide key players a chance to respond to an interim report which found that SPC Ardmona’s application for emergency assistance was not warranted.
The outcome was disappointing, but not surprising.
Since the Agreement on Safeguards was established in 1994, only one Australian application for assistance has been considered, before being rejected. Our international competitors meanwhile continue to enact emergency safeguard measures.
Between October 2011 and April 2012, 26 safeguard actions were taken by WTO members, including Brazil, Israel, Turkey and Indonesia.
The Commission’s interim report admits to applying “a high standard of evidence” to determine the case for provisional safeguard measures, referring to concerns with “the poor quality of some countries” and the need to avoid being “vulnerable to challenge by other nations”.
These concerns should not be grounds for rejecting an application.
It is important for Australia to continue our strong tradition of trade liberalisation, without using it as an excuse to not support local industry.
While the Commission recognised that ‘serious injury’ had occurred, they cited SPC Ardmona’s business plans and contract arrangements into 2014 as evidence that emergency assistance for the industry is not warranted.
Tell that to the Goulburn Valley growers pulling out up to 750,000 surplus peach and pear trees to address biosecurity concerns. With a commercial lifespan of up to 100 years, the removal of these trees is having an immediate impact on industry that will be difficult to repair.
A lot has changed since Australia signed up to the GATT agreement in 1948, and Director General Pascal Lamy of the World Trade Organisation has suggested ‘revisiting’ the existing rules on preferential trade arrangements. Given the increasing global connectedness of international trade, it is difficult to prove that the importation of goods is the single cause of serious injury.
Safeguards measures are a legitimate method to ensure that our global trading agreements operate with integrity, and we should not shy away from using them.
During Senate Estimates, Productivity Commissioner, Peter Harris, acknowledged that short-term relief for local industries is inherently part of an open international trading environment.
Taking the hard line and often high road on matters of international trade has left Australia trailing behind our competitors while the United States holds fast to its Farm Bill; Europe applies Common Agricultural Policy (CAP) despite recent reviews, and relative newcomers to the WTO such as China, according to a recent OECD report are increasing subsidies.
In the past four years Australia’s food processing industry has taken a battering which has seen over $800 million lost, 11 food processors close and 1200 people lose their jobs. It’s a severe loss of knowledge, capacity and critical mass, not to mention the human toll.
The Nationals want to see local industry prosper and champion the benefits of local trade. They should not be viewed as mutually exclusive or competing viewpoints in the public debate.
Through the legitimate use of WTO sanctions such as safeguards, bilateral and multilateral agreements can provide an opportunity for our local industries to prosper.
As we discuss the benefits of Australia being ‘open for business’, let’s make sure that there’s stock on the shelves, staff behind the counter, and someone manning the till.
Bridget McKenzie, Nationals Senator for Victoria