5 minute read
Trade barriers
impacting Australian vegetables
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f AUSTRALIAN growers export approximately $3 billion worth of horticultural commodities annually.
BY DR KRISTEN STIRLING SENIOR CONSULTANT, RMCG
Non-tariff measures (NTMs) are additional requirements that a country can introduce to ensure imported products are safe and healthy for consumers.
This project delved into the complex world of NTMs in 13 international markets to better understand their impact on specific commodities in the Australian horticulture industry. Market access is critical for the Australian horticulture industry. Australian growers export approximately $3 billion worth of horticultural commodities annually, accounting for about 25% of Australia’s total production. Although there has been a general decrease over the last 10 years in tariffs that restrict trade, there has also been a steady emergence of ‘non-tariff measures’ (NTMs), that can directly impact export markets. NTMs can lead to benefits from both an import and export perspective, however export markets often experience a decrease in activity as compliance costs rise and exporting becomes less profitable1 . To facilitate collaboration between industry and government in addressing NTMs that are unfair or overly costly barriers to trade, RMCG were engaged to identify and understand the impact of NTMs applied to specific commodities, and more broadly across the horticulture industry. Across 13 international markets, we looked at 14 different horticultural commodities including 4 vegetable categories: • carrots • leafy greens (lettuce, cabbage, spinach, Brussels sprouts and rocket) • potatoes • onions.
To inform the review data was collated via desktop research, analysis of trade and NTM data sources and industry consultation. For the 14 Australian horticulture sectors 13 1,734 NTMs were identified across importing countries. reviewed, a total of 1,734 NTMs were identified across 13 importing countries. New Zealand imposes the highest number of NTMs (527) followed by Thailand (266), China (145) and South Korea (130) (see Figure 1). The majority of NTMs imposed by importing countries are due to Sanitary and Phytosanitary measures used to protect against pests of concern.
Canada
United States
13
International markets
United Kingdom
China
India
Thailand
Indonesia
Number of NTMs by country for all commodities
100 200 300 400 500
FIGURE 1. NUMBER OF NTMS PER COUNTY FOR AUSTRALIAN HORTICULTURE Japan South Korea Taiwan
Vietnam
Philippines
New Zealand
These measures generally target food safety and quality assurance. For horticulture fruit flies such as Queensland Fruit Fly and Mediterranean Fruit Fly are a major concern. Fortunately, vegetables are not impacted by these pests. Table 1 identifies the total number of NTMs imposed on the vegetables reviewed, the countries who impose the most NTMs for each vegetable and the main reason why. The majority of NTMs imposed by importing countries are due to Sanitary and Phytosanitary measures used to protect against pests of concern. Sanitary and Phytosanitary measures can include: • A systems approach (such as application of IPM approach in orchards) • Traceability requirements (record keeping and registration of producers and packhouses)
TABLE 1. THE NUMBER OF NTMS, MAIN IMPOSING COUNTRIES AND THE REASON FOR THE NTM.
Vegetable
Total number of NTMs
Main NTM imposing countries (and number of NTMs imposed) Reason Leafy greens 86 • New Zealand, the Philippines and South Korea (10) • India (9) • Thailand (7). The majority of these NTMs relate to: • Pre-shipment inspection and other formalities. • Sanitary and phytosanitary measures.
Carrots 17 • Taiwan (9) • South Korea (3) • Thailand (2). Potatoes 89 • Thailand (26) • Indonesia (23) • South Korea (15).
Onions 22 • Indonesia (6) • Thailand (5) • Taiwan (4) • New Zealand (3). The majority of these NTMs relate to sanitary and phytosanitary measures.
• The majority of these NTMs relate to sanitary and phytosanitary measures.
• The majority of these
NTMs relate sanitary and phytosanitary measures and largely are due to pests of concern, such as the Potato
Spindle Tuber Viroid (PSTVD). • Treatment for elimination (irradiation, fumigation and cold/heat treatment) • Conformity assessment (such as inspection requirements and phytosanitary certificates).
The review identified a range of challenges and barriers associated with NTMs impacting on producers, supply chains and the various horticultural sectors.
For the vegetables reviewed (carrot, leafy greens, potato and onions) these included: • The use of quotas by importing countries to protect domestic product • Maximum Residue Limits (MRLs) applied to exported vegetables particularly: — where there are inconsistencies in limit levels and testing programs — for export companies that consolidate produce from wholesale markets • Industry capacity and readiness to export particularly in building a better understanding of consumer trends in export markets
• Lack of or incorrect information: — due to the complexity of stakeholders involved in the supply chain and at a government level, cultural differences, and geographical distances — related to Australia’s own internal quarantine system and the interpretation of export requirements • Airfreight costs particularly since the start of the COVID pandemic • Inefficient processes (and the cost implications) associated with export documentation, certification and inspections. The impact of NTMs on the Australian horticulture industry include: • Reduced competitiveness against competitors due to increased costs associated with treatment, packaging and certification • Reputational damage in key markets due to poor product quality as a result of fumigation treatments and held product at importing markets • Reduced appetite to export due to perceived risks associated with poor or inaccurate information and political tension • An inability to forward plan due to sudden changes in quotas
f THE majority of NTMs imposed by importing countries are due to Sanitary and Phytosanitary measures used to protect against pests of concern.
• Lack of market access or rejection of product at importing country when
Australian exporters are unable to meet MRLs due to sudden changes in allowed limits or the imposition of limits dictated by supermarkets. RMCG developed recommendations for those involved in the trade of horticultural products based on insights from the consultation process. These are detailed in the project summary available from www.rmcg.com.au/app/
uploads/2021/11/NTM-summary-2021FINAL.pdf
Individual reports were also developed for the 4 vegetables assessed (carrot, leafy greens, potato and onions). These can be accessed at www.rmcg.com.au/
case_study/trade-barriers-impactingaustralian-horticulture
MORE INFORMATION
Dr Kristen Stirling, kristens@rmcg.com.au or phone 0488 908 416. This project was managed by Hort Innovation and supported by funding from the Department of Agriculture, Water and the Environment.
