TPP's bitter-sweet lessons

The TPP deal with 11 other Pacific Rim countries saw Australia’s annual quota of 87,000 tonnes for sugar exports to the US lifted significantly, but not enough for some.

Subsequently, National party members are threatening to cross the floor and vote against its ratification due to the bitter-sweet sugar deal.

Under the TPP signed by Federal Trade Minister Andrew Robb, another 65,000t will be added to Australia’s current quota taking the bottom line to 152,000t.

Australia will also receive a further 23 per cent of additional WTO sugar allocations the US makes which – according to USDA forecasts on local import needs – could see that volume expand to 400,000t by 2020.

However, the Australian sugar industry wanted about 700,000t delivered in the TPP believing the local industry’s liberalised trade values deserved respect and acknowledgement from the heavily protected US market.

Mid-year, federal Agriculture and Water Resources Minister Barnaby Joyce said the US consumed about 10 million tonnes of sugar per year and produced 7mt leaving the remaining 3mt “hanging out there”.

“We're not putting their producers out of a job,” he said of increasing Australian exports to the US via the TPP.

“We just want a greater say…in the part that they can't produce for themselves.”

But in the end, it was the US sugar industry’s craving for economic protectionism that again won the day.

Mr Finlay said the US sugar industry lobby “put nothing on the table” during the final negotiations, while applying great pressure on US politicians which went all the way up to the US president “to actually give no ground, particularly to Australia”.

“We got something and obviously industry wanted a lot more but the US sugar lobby didn’t want us to get anything,” he said.

“We’ve got a slightly improved position on the tonnages that can actually be sent to the US now.”

Mr Finlay said US sugar lobby members had also asked their Australian counterparts, why they had even bothered coming over to Atlanta for the critical final round of talks.

“(Canegrowers chairman) Paul Schembri told me the US sugar industry spent hundreds of millions of dollars on advocacy and are so strong in Washington,” he said.

“They’re the most powerful agricultural advocacy group in the US and maybe the world.

“The price of sugar in the US is about 22 cents a pound and the market in Australia is 12 cents a pound.

“The detail within the sugar stuff is quite dirty; it’s quite messy.

“Australia used to have wonderful access for sugar into the US but they’ve certainly been squeezed out over the last 10 or 12 years.”

Mr Finlay said the American Sugar Alliance (ASA) - representing US sugar producers – took a hard line during the TPP talks last week.

But he said another group representing US sugar consumers and big companies the - the US Sweetener Users Association - wanted the TPP to deliver greater access to Australian sugar “and to a certain extent were supporting Australia”.

The ASA is a national coalition of sugarcane and sugar beet producers, processors, refiners, suppliers, workers and others which describes its role as protecting local industry against “heavily subsidized sugar” produced in other countries like Brazil and sold onto the world market.

“The ASA still needs to review the final language and verify details in the TPP but we are cautiously optimistic about what we’ve learned from US trade negotiators,” the Alliance said.

“It is important to farmers and taxpayers alike that TPP not threaten America’s no-cost sugar policy.

“And, it appears that United States Trade Representative Michael Froman and his team have achieved that goal with their skillful negotiation of provisions appropriate to such a complex market in this 21st Century trade agreement.”

A US Government funded support program ensures the nation’s 4000 cane growers receive a guaranteed level of around US 22.5 cents a pound regardless of the world price.

Alternatively, the SUA represents companies that utilise nutritive sweeteners in their business operations and their trade associations and says it seeks to make US sugar policy more market-oriented, both domestically and internationally.

In its statement on the TPP agreement, the SUA commend Ambassador Froman and the US negotiating team for crafting a deal which “reversed the US sugar lobby’s previously successful efforts to keep Australian sugar out of the US market”.

“Based on the details that have been released, the TPP will provide much-needed additional market access for US sugar imports from Australia - however, we need more sugar than provided by the agreement,” the statement said.

“While we have gained 65,000 metric tons in additional access, the effect of the 23pc additional quota allocation is still largely unknown.

“What is known is that US users of sugar are facing a shortfall in sugar availability that far exceeds the 65,000 metric tons in new sugar allocation clearly provided to Australia.”

Mr Finlay said the NFF’s role in Atlanta was to support progress during the TPP negotiations which were “very intense” last week as negotiators worked through the night until daylight, on most days.

“I’m not in the room but the pressure the US was trying to put on Andrew Robb and the negotiators was intense,” he said.

“However, they held their ground and said the US had to move their position.

“I’m the third NFF president to be involved in TPP after Jock Laurie and Duncan Fraser in the past five years.

“These negotiations are long and tough and every word is scrutinised.

“Everyone has professional negotiators – the best of the best - and the US are just so tough.

“Obviously the US had their positions and didn’t want to move on anything but that’s not how you conduct negotiations around a deal; everyone has to tend to give a bit.”