Credit: Original article can be found here
The Queensland agriculture and food sector is diverse, producing a wide variety of high-quality food and fibre products and enjoys a well-earned global reputation as safe and nutritious. We are a food-secure state, exporting about $10 billion or 58 per cent of all agricultural output worth. By value, China is Queensland’s largest agricultural product export destination at 21.7pc, however, recent market restrictions imposed for critical primary products have hurt some Queensland businesses. While new markets have been successfully secured, some have been less lucrative.
In coming years, we will see tariffs on Australian produce decrease in many countries. For example, the Indonesia-Australia Comprehensive Economic Partnership Agreement, which came into force last year, enables more than 99pc of Australian goods exported to Indonesia enter duty free or under improved and preferential arrangements, while tariffs on lamb and beef to Korea, some wine products and barley to Mexico and refined sugar to Canada will all fall this year.
Maintaining existing markets and diversifying into new markets will be key to ensuring resilience and growth in the sector. However, for exports to increase further, there will need to be substantial investment in trade relationships, supply chain and logistics. Access to markets can change quickly due to macro-political factors such as tariff changes and import protocols, so the relationships between producer, country, supplier and consumer are increasingly vital.
One of the most significant emerging trade barriers will be carbon or emission intensity, with numerous Carbon Border Adjustment Mechanisms being implemented. While the Queensland government has made a 2050 net zero carbon commitment, and the federal government is working on expanding the Emission Reduction Fund methodologies and creating new credit and certification systems under the Agricultural Stewardship Package, the timing and adoption of these measures is insufficient to meet incoming legislation globally. It is also unclear if these existing schemes will be accepted and recognised by our trading partners.
The United Kingdom and New Zealand have already legislated net zero targets and Europe is reforming its current emissions trading system. By 2023, the European Union’s Carbon Border Adjustment Mechanism will cover power and energy-intensive sectors. It has been designed to pursue climate objectives and align with World Trade Organisation rules to encourage the decarbonisation of both EU and non-EU industries.
While countries developing carbon and emission intensity border mechanisms are quick to note that they will not be used as a tool to increase protectionism, they will undoubtedly act as a trade barrier for the import of goods that do not meet carbon intensity targets set on domestic (primary) products. Particularly as many countries have stated an expectation that all free trade agreement partners will respect and implement Paris Agreement targets. And with the 2021 United Nations Climate Change Conference in November, there may be new targets and expectations on the horizon.
Improvements in emissions intensity will increase Queensland agriculture sector competitiveness in trade-exposed markets by differentiating our products even further. The Queensland sector needs coordinated action at the state and federal level to assist the sector to develop certified systems supported by science; and an integrated policy approach that will promote investment, innovation and the adoption needed to deliver a zero-emission based economy and an agricultural sector that has a competitive advantage in the new carbon-focused trade economy.