Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, at the Beef '97 Expo, Rockhampton, 14 April 1997

Introduction

It is a great pleasure to open the Beef '97 Expo, Australia's national beef exposition, here in Rockhampton, one of the most important beef producing centres in Australia.

First, I want to congratulate the organisers of the '97 Expo and the Rockhampton community for showcasing Rockhampton and north Queensland to the rest of Australia - and by extension - to the world, and promoting one of Australia's major industries - beef.

And let me state at the outset my strong support for the objectives of this Expo. This is Australia's national beef exposition. We have here a show case of the industry, to be visited by some 20,000 people and international visitors from 19 countries. It provides a wonderful opportunity to bring together all those in our rural communities whose hard work and innovation make up this important industry. And it brings together the industry with its customers and business partners, domestic and international.

To all the people who have worked to bring the '97 Expo together I offer my congratulations. And I urge all those visiting this Expo to take note of the theme - "Vision Creates Opportunity" - and make the most of the work and energy of the organisers by getting on with some business!

Let me deal with the vital matter of Wik. If there is to be a future for the great Australian beef industry, the great Australian wool industry, the great Australian mining industry, then there must be extinguishment which validates pastoral leases. It is stating the obvious to say that the extinguishment must be comprehensive, it does not mean wiping out native title across mainland Australia, but it does mean effectively providing for extinguishment in respect of pastoral leaseholds.

This, of course, is no more or less than was provided for in the preamble of the Native Title Act in clear cut terms and incidentally what Noel Pearson and Paul Keating accepted as reality at that time.

It is what I am batting for and I would hasten to add there is growing support for this throughout the Liberal and National Parties and some elements of the Labor Party. Although clearly not the Shadow Minister for Aboriginal Affairs, Daryl Melham, who insults us all by saying pastoralists are merely on about a land grab.

Let me say, in politics and in government, there is never a dull moment.

Australia's Beef Industry Into the Future

The Government is very conscious that for export sectors like the meat industry to maintain and improve export returns and market share, it must make reforms here at home. We have done much to get government spending in order, to create a low-inflation and low interest rate environment, and to restore confidence in the economic management of this country.

On the microeconomic front, we have established the basis for significant improvement to the industrial relations framework, and in no industry is the need for such reform as evident as in the meat processing industry. And we are continuing this process - in all sectors of the economy, with a particular focus now on how to achieve real reform of the waterfront.

Closer to home, my colleague, the Minister for Primary Industries and Energy, John Anderson, recently announced the Government's decision to restructure the Australian red meat industry organisations. This decision offers the beef industry a unique opportunity to build for the future, and a brighter future all round for producers, processors and exporters.

This decision will clear the way for the industry to run its own affairs and develop for the industry a much more commercial focus to its activities. This must mean leadership from producers and processors, and the Government will be doing all that it can to create the environment in which industry can exercise such leadership.

And leadership is essential. There can be no doubt that as far as this industry has come in the last decade, there is much to be done. The international environment is becoming more competitive, and consumers more demanding. So the challenge before industry is substantial.

Above all else the industry must continue its work to ensure the safety and quality of our product. Our standards are already very high, the equal or better than anyone in the marketplace, but we must do better still. This means - and I want to stress this point - each and every participant in the industry being aware of this requirement and making the objective of the highest possible levels of safety and quality and integral part of your work.

You have seen some difficult years. Now it is time to turn that around.

The International Outlook for Beef

An export led recovery is needed as Australia depends on exporting up to 60 per cent of its beef production.

The good news is that improved returns for beef are forecast for 1997-98. This outlook depends importantly on the combined expected influences of lower beef production in the United States, growing Asian demand for meat and lower feedgrain prices.

Beef production in the US is expected to fall by 1 per cent in 1997. A recovery in US prices of manufacturing quality beef, reflecting reduced cow slaughter, is expected to flow into increased demand for imported manufacturing beef. As a result Australian beef exports to the US are forecast to increase by almost 3 per cent in 1997-98.

Australian exports to Japan are forecast to increase by 4 per cent in 1997-98 in response to increased demand for imported beef as Japanese concerns over BSE and E.coli recede. And in Korea, domestic beef production is expected to fall in 1997-98, and Australian beef exports are forecast to increase to meet the rising domestic demand for beef.

So - if you believe the forecasts - the international environment is looking a bit brighter, and with some hard work we can make the most of this.

The Government's Strong Commitment to Exporters

Since its election last year, the Government has demonstrated a strong commitment to facilitating industry exports and relevant commercial developments as part of our trade and economic policies. More than that, we have achieved practical results that deliver real benefits to Australian exporters, including in the beef industry.

The creation of the Supermarket to Asia initiative is an important example of our commitment to the food industry and an example of our pragmatic, results-oriented approach that is aimed at achieving substantial increases in Australia's food exports to Asia.

We are working hard too on the market access priorities for the industry, to secure better market access for beef products in overseas markets.

During 1996 we were able to negotiate a 40 per cent reduction in the discriminatory tariff against Australian beef in Taiwan ahead of Taiwan's accession to the WTO, with further gradual reductions in tariffs until eventual elimination of discrimination after the accession. This is an extremely important development in one of our major beef markets.

The fact that this reduction was achieved in the context of Taiwan's accession to the WTO emphasises that the multilateral arena still offers us benefits if we push hard enough.

Bulgaria is another example of us using the WTO accession process to secure additional beef access. During 1996 we secured additional beef access to the Bulgarian market, on an MFN basis, from which we expect to benefit and supply up to an additional 11,000 tonnes of beef worth approximately $21.5 million. Of course this is a relatively small piece of progress, but we must work to open up markets whenever and wherever we can.

And let me note the remarkable progress made in the trade of live cattle to markets such as Indonesia. This is providing an important source of income to the northern cattle industry. We must work to take advantage of this trade while also ensuring that markets for meat are open to our industry.

In some markets we face real challenges to our market position. For instance, the Government was very surprised and disappointed by the decision of the Canadian Government to unilaterally reduce the quota in place for Australian beef to 35,000 tonnes. I have told the Canadians that I object to this decision, and that the Government will examine all options to resolve the issue including WTO action.

I spoke just this morning with my Canadian counterpart, Mr. Eggleton, about this and other issues, and we agreed to further discussions at an early opportunity.

We have raised with the Philippines our concerns about the confusion and uncertainty, and the potential constraint on trade, arising from the introduction of a tariff quota for beef. This arrangement is complex and imposes a considerable additional burden on exporting countries. We will be watching its implementation very carefully, and will be taking up our concerns with the Philippine authorities as necessary.

We are also concerned about the suggestion made in the United States by some interests for re-allocation of the country-specific share of the beef import quota. This quota was of course a major element of Australia's bilateral settlement with the US at the end of the Uruguay Round, and an outcome that industry worked hard for. We have made clear to the US that we would oppose any re-allocation, which would be inconsistent with our bilateral settlement and WTO obligations. So we need to be vigilant about protecting our interests in this immensely important market.

With regards to my comments earlier on improving prospects in Japan I must make mention of the fact that adding to the attractiveness of imported beef there is the cut in the Japanese applied tariff on beef imports to 44.3 per cent, which was effective on 1 April. Prior to 1 April the tariffs were set at 46.2 per cent for chilled beef and 50 per cent for frozen beef - the frozen beef tariff had been snapped back in August 1996.

I raise at every opportunity with my Japanese counterparts the deleterious effect of the snapback provisions in Japan on the beef trade which results in a flood of imports early in the Japanese financial year and consequent stockpiling. To date, my admonitions have fallen on deaf ears but I will continue to stress the market distorting effects of this mechanism.

The last market I want to mention is Korea, already an important market to Australia but one with great potential for further growth. Consultations were held with Korea last month as part of our regular round of bilateral beef consultations and provide the framework for our penetration of the Korean beef market. We are seeking to ensure a smooth transition to liberalisation in 2001 - a crisis at the eleventh hour would not be in the interests of either the Korean beef industry or exporters such as Australia.

Conclusion

In conclusion, there are many challenges facing this industry, but this is an industry which has already demonstrated an immense capacity to overcome challenges in becoming the major export industry that it is. This Expo provides an opportunity for us to recognise these achievements, and to recommit ourselves to the growth of the industry. Let me assure you that for its part the Government is committed to creating the right environment for industry to prosper.

I have great pleasure in declaring the Beef '97 Expo open.