Safe Trade is a Two Way Street

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Safe Trade is a Two Way Street

• Presentation to 2008 ABARE Outlook Conference
• By Brian Jeffriess, CEO - Australian Tuna
  Association

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Key Points

• Seafood most globally traded product
• - 38 supply is traded 2.6 billion people have
  their highest protein from fish.
• Australia substantial importer/exporter
• Safe trade covers pests/diseases residues other
  WTO issues

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Key Points Cont.

• Potential challenges increasing
• -Shift to aquaculture, with higher biosecurity
  and WTO issues
• Aquaculture heavily from developing countries
  with evolving standards
• Is Australia ready to meet challenges?
• Is the current ALOP sustainable?

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Global Seafood Supply
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World Fish Trade Export Value

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Net Exports From Developing Countries

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World Aquaculture Production growing quickly

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Marine and Inland Fisheries Top 10 Producers

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Marine species- Top 10 -

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Per capita food fish supply (kg)
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Australian Seafood Production/Trade (m)

• FY GVP Exports Imports
• 2003 2,164 1,485 950
• 2004 2,060 1,319 905
• 2005 1,958 1,236 959
• 2006 1,986 1,237 1,028
• 2007 2,053 1,159 1,184
• 2008 (f) 2,110 1,153 na
• Source ABARE Fisheries Statistics for 2003-2006
  ABARE March Quarterly 2008.

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Changing Sourcing of AustraliasExports/Imports

• Share of Australian Exports China/HK
  Japan
• ( total) 2000/01 28 44
• 2005/06 42 31
• Share of Australian Imports China Vietnam
  Thailand
• ( total) 2000/01 3 5
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• 2005/06 10 13
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• Source ABARE Fisheries Statistics
  

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Biosecurity/Market Access Issues

• Tariffs av. 4.5 globally but high in selected
  areas (eg EU for non-ACP).
• NTBs largely limited to arbitrary customs
  procedures.
• ALOP in most countries less conservative than
  Australia many diseases endemic, and about
  managing risk
• World reminded of risk by 2007-2008 major disease
  outbreaks in Chile salmon farms.

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Biosecurity/Market Access Issues

• Australia has few outbreaks, but of major
  concern
• Current virus affecting abalone wild/farm stocks
  in southern Australia
• Pilchard mortality events in the 1990s in the
  GAB
• Northern Pacific Seastar in southern Australia
• Three current IRAs Prawns Freshwater
  Crayfish Freshwater Finfish.

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Biosecurity/Market Access Case Study
1Salmon/Pilchards 1999-2003

• 1990s Two significant(sardine) mortality
  events southern Australia
• - Australian tuna farms import 30,000t pa
  frozen
• 1998 World Trade Organisation rules -
• 1. Australian salmon IRA/risk management
  measures exceeded measures required
• 2. Canadas appeal against Australia had also
  claimed Australias salmon import measures were
  inconsistent with the measures applying to
  pilchards.
• 2003 A BA draft report recommended the lifting
  of almost all the management measures
  restricting import/utilisation of pilchards.

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Main Issue

• What if the WTO had found Australia was being
  inconsistent?
• This potential interest conflict will be
  increasing problem in two-way trade, as it is in
  other industries.

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Biosecurity/Market Access Case Study 2Prawn IRA

• Major current seafood biosecurity issue is Prawn
  IRA and Interim measures
• - Measures restrict import of uncooked prawns.
• - Problem partly relates to widespread use of
  these prawns as bait.
• Issue currently at public submission, then
  Eminent Scientists Group, etc.
• Prawns the largest traded seafood how does
  Australias ALOP compare?
• Possible WTO appellants are Thailand, Vietnam,
  China, etc
• WTO appeal likely to be based on same issues as
  raised in salmon case, including inconsistency.

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Future Challenges/Strategies

• Background
• Australia relatively free from pests/diseases
• Follows very low ALOP
• New (Beale) Review of Quarantine and Biosecurity
  framework

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• Challenges/Strategies

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One Community Opinion

• Reality is that seafood imports now exceed
  exports and gap will accelerate era of cheap
  imports (imported prawns 10/kg vs local 20/kg).
• Parallels in Japan and Australia
  importers/retailers have higher stake in IRA
  outcomes.
• However, will seafood Biosecurity become an
  environmental/NGO issue
• How will this wider community interest in
  imports show itself in Biosecurity policy?

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Two Shift in Exporter and Marketer Interests
Much higher of Australian seafood (and other
exports) go to new markets such as China/Hong
Kong. Most Australian marketing companies are
now importers and exporters. Some Australian
fisheries depend heavily on processing in China,
and re-export to Australia, etc. Is industry
support as strong for new biosecurity
restrictions?
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Three - Greater Importance of Seafood in the
Regions

• The last salmon IRA, the Australian salmon GVP
  was around 80m now around 250m, including one
  substantial listed company.
• At last pilchard IRA, the SA pilchard catch was
  about 10,000t now a quota of 30,000t
• At last pilchard/salmon WTO interaction, Tuna
  Farming GVP was about 100m now ranges
  150-250m.
• Early this decade, new aquaculture such as
  kingfish hardly existed.
• Key regions such as Eyre Peninsula building
  tourism around aquaculture

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Four Shift to Imports from Developing
Countries

• The new major import sources are Thailand, China,
  Vietnam, Indonesia, Philippines
• Much less developed inspection and control
  systems
• And possibly more aggressive in WTO.
• Review needs to consider more resources to
  pre-border in quarantine continuum.

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Five - Companies, Not Countries

• Global seafood trade increasingly dominated by
  international marketing companies (eg Nissui,
  Maruha)
• IRA outcomes based on species or region these
  companies will shift base overnight.

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Six Growth of Aquaculture

• The continued rapid growth of aquaculture leads
  to greater risk of diseases (eg from stocking
  rates, etc)
• Aquaculture can make disease easier to identify
  and contain BUT not if it spreads to the wild
  stock (current southern Australia virus causing
  die-off in abalone).
• Countries exporting to Australia will see
  aquaculture as
• - Greater reason for equivalence
• - Greater reason for regional zoning.

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Seven Accelerated Trade/Capacity to Manage IRAs

• It is clear the BA system is stretched under the
  current load likely to be worsened by
  accelerated import volume new species more
  sources and more seasonal supplies (with
  different risk profiles).
• Note Only offset might be more highly processed
  product (ie lower risk profile).
• Review must result in more resources for BA, and
  follow-up AQIS work.
• Under the IGA will the sharing of
  responsibilities on post-border be part of the
  quarantine continuum work?

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Eight Residues

• Likely to become a key trade issue in next decade
• Countries could selectively apply standards
• (eg Japan Dioxin/PCBs but not mercury)
• CODEX now getting involved
• Generally Australia has strong competitive
  advantage on residues but also cant selectively
  apply

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Nine Other WTO Issues

• WTO now more in dangerous territory of trade
  measures from labeling environmental
  (sustainability) accreditation international
  environmental agreements.
• Note the Primary Industries Ministerial Forum
  Communique (29/2/08) Ministers agreed to
  contribute to any projects investigating the
  application of carbon footprint calculations used
  for marketing or trade related measures.
• Australian version of multi-functionalism????

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Ten Aquatic Pathology Services

• Emerging shortage at State (ground) level.
• Will affect capacity to identify/solve
  pest/disease threats

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Eleven Intergovernmental Cooperation

• Emphasised by Ministers last week.
• Essential part of IGA
• Essential part of emergency management
• Local management important to aquatics
• (eg ocean-going yachts areas close to PNG
  recreational bait sales).

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Twelve Absence of Cost-Sharing Agreement

• Not in place, despite years of trying problem is
  aquaculture high value/concentrated (eg 2
  million in one tuna pontoon).
• Disincentive to report.

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The Aquatic Challenges The Beale Review

• The Review will not review Australias ALOP
• - The aquatic challenges outlined here question
  whether the current ALOP is sustainable in the
  face of seafood changes.
• The Review will make a major contribution if it
  can progress
• - The resources available to BA to cope with
  IRAs
• - The resources available to AQIS/Other
  Agencies to increase
• coverage of the pre and post border parts of
  the continuum
• - At least a discussion on the way that BA
  assesses the risk profiles.

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The Aquatic Challenges The Beale Review Cont.

• Governments can contribute more
• - If they be clear on Australias approach to
  new measures affecting trade (eg residues,
  labeling, environmental agreements).
• The Australian quarantine brand has long been an
  international competitive advantage for
  Australian industry how does it remain current?
• Will quarantine management get easier?

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Thank You