The China free trade agreement will bring significant benefits for Australia and Labor wants it finalised. But it's not yet the best agreement it can be because for some strange reason, the Government has not insisted that foreign workers are only used when it is clear Australians are not available for the job.
We've always ensured this by insisting companies, foreign and local, test the local labour market by advertising (and using other modern recruitment methods) the jobs in question.
It is entirety possible for the Parliament to put mandatory labour market testing in place without offending the China agreement. I just don't understand the Government's reluctance because I don't believe the Chinese will have a problem with it. They understand that it's natural that every country wants to give local workers priority.
It's now time to quickly fix the problem and to bed-down the China FTA. Having said that, we must be careful not to see the implementation of preferential trade agreements as the end of our work in agriculture policy.
Accessing China and other markets under the same tariff regime as farmers from other countries is important because it improves our competitiveness. For example, if a South American country is sending the same product to Asia produced at exactly the same cost as Australia's product but it faces a zero tariff while Australia faces a 10 percent tariff then Australia can't compete.
But there are two important points to be made about this scenario.
First, we still need to improve our cost competitiveness and while proximity gives a freight-cost advantage over our competitors in some Asian markets, it's not true for all Asian markets. Much work still needs to be done to reduce our production and supply chain costs here in Australia.
Second, Australian growers and producers need to increasingly focus their product choices in areas that offer something special rather than in commodity markets where they are price takers and subject to the whims of world markets. Australia's greatest competitive advantage lies in its reputation as a producer of clean, green, safe and high quality product. Building on that will represent the most efficient allocation of our natural, human and financial resources.
These are the products which will secure large price premiums amongst the growing middle classes in Asia. Products like:
• marbled Wagyu beef in which the fat is of the healthier kind.
• wheat which is specifically designed as an ingredient for Japan's Udon noodle market.
• a range of value-added products that make their way from the paddock in Australia to the Beijing kitchen - packed in Australia's clean, safe environment.
• products that satisfy the new-age consumer who is looking to buy food which has been grown in an environmentally sustainable way or in a manner respectful of animal welfare.
Of course, being more competitive in China thanks to reduced tariff barriers should lift profitability and therefore, allow farmers to invest more in innovation, more sustainable farming practices and other productivity enhancing initiatives. This should be a virtuous circle.
The missing piece in this loop is government. The Abbott Government is one without a plan for Australian agriculture. Having failed to offer any plan, strategic guidance or goals, its agriculture White Paper has disappeared without trace.
Better market access is crucially important to Australia's agriculture sector but we must be careful it doesn't encourage complacency. Sadly that is the only area in which the Abbott Government is leading the way.
This article was first published in FARMONLINE on Monday, 7 September 2015.
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