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Australia's trade agenda balances the developed and developing worlds

By Mark Vaile - posted Friday, 15 November 2002


Development and market access

The benefits of trade and investment liberalisation for developing countries are clear. That is why market access is central to the Doha development agenda – a point that Oxfam and other prominent NGOs are now strongly advocating.

Australia’s commitment to market access is reflected in what we have been doing ourselves for more than 20 years.

We have benefited – and continue to benefit – greatly from lower barriers to trade and investment, both in our own market and overseas.

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Without meaningful market access to overseas markets for all countries, real and sustainable economic growth will be that much harder to achieve.

This is especially the case in agriculture, where Australia shares much in common with developing countries.

Agriculture contributes vitally to our nation’s export performance: one in five dollars earned from selling Australian goods overseas is earned by agriculture, and two-thirds of our agricultural production is exported.

Nearly 60 years after the Bretton Woods system was established, and the GATT formed to lower barriers to trade, agricultural products are still being treated differently to industrial products.

And markets for agricultural goods remain skewed by protectionist barriers – tariffs on agricultural products, on average, are three times higher than on any other product you might find in the supermarket.

The World Bank has estimated that rich countries subsidised and protected their farmers to the tune of US$350 billion in 2001.

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That is nearly US$1 billion every day, or seven times the value of official development assistance from OECD countries to developing countries, or twice the value of all agricultural exports from all developing countries.

  • In the European Union, the UK-based Catholic Agency for Overseas Development estimates that the average EU cow receives about $4.00 in taxpayer-funded support every day. So a European cow receives more, each day, than 3 billion people in the world’s developing countries earn.
  • In the United States, a highly restrictive and complex quota regime on sugar is accompanied by an extraordinarily high out-of-quota tariff barrier calculated at 181 percent - effectively preventing developing country sugar producers from accessing one of the world’s richest markets.
  • And in Japan, even after eliminating non-tariff barriers, the Japanese rice market remains protected to an extraordinary degree – according to the WTO, Japan’s rice tariffs are 406 percent. Making it almost impossible for Cambodia’s subsistence rice farmers to access this lucrative market.

Australia has led the fight for agricultural trade policy reform in the WTO, especially as Chair of the Cairns Group of agricultural exporters which brings together developed and developing countries.

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This is an edited version of a Telstra Address given to the National Press Club, Canberra, on Canberra, 13 November 2002.



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About the Author

The Hon Mark Vaile MP is the federal Minister for Trade, Deputy Leader of the National Party, and Member for Lyne (NSW).

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