With the Senate about to consider approving the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11), many Australians are trying to make sense of the competing views put forth by our politicians, civil-society, academics and the business community. So, what is the TPP-11 agreement, and what does it mean for Australia’s wine industry?
Born out of the negotiations between the 12 signatories to the original Trans-Pacific Partnership (TPP) that commenced in 2008, TPP-11 was signed on 8 March 2018 in Santiago, Chile, with the United States withdrawing its support for the agreement soon after President Trump’s inauguration. office.
The text, the side letters and accompanying National Interest Analysis (NIA) were tabled in the Australian parliament on 26 March 2018, passing the House of Representatives on 17 September 2018. The Bills to enable TPP-11 will soon be considered by the Senate.
In a positive example of bipartisanship, the Bill was supported by both of the major parties, despite some reservations over particular elements by Labor. Others, including the Greens, Senator Rex Patrick of the Centre Alliance and Katter’s Australia Party, have expressed a range of concerns, and in some cases their outright opposition to the deal.
At a time when farmers around the country are experiencing crippling drought, deals like TPP-11 give hope for a long-term sustainable future. The Winemakers’ Federation of Australia supports TPP-11 as a driver of agricultural exports, greater prosperity and well-being and jobs in rural and regional Australia.
The deal will have real and immediate benefits for the wine sector. Australia will gain a competitive advantage, beyond that obtained through current bilateral agreements, in four markets: Canada, Malaysia, Mexico and Peru. Particularly exciting is the opportunity presented in Mexico, which maintains a 20 per cent tariff on Australian wine imports. The removal of this tariff will level the playing field for Australia’s wine producers, who are currently competing at a disadvantage against wines from Chile and the United States. In addition to this, TPP-11 will drive further growth in Canada, Australia’s fourth largest export market. It will enable us to capitalise on the increased marketing investment in North America that has come from the Australian government’s $50 million Export and Regional Wine Support Package.
In addition, this is the first Free trade Agreement that makes a significant effort to address Non-Tariff Barriers (NTBs). Non-tariff barriers are the biggest problem wine exporters face, adding unnecessary cost and complexity to operating internationally. This agreement has a specific technical annex dealing with wine and spirits that will reduce current barriers around compositional issues and labelling and insure against the creation of new barriers in these areas.
Overall, this is a very good agreement for the Australian wine sector and we believe for the Australian agricultural and food processing sector as a whole.
Written by Winemakers’ Federation of Australia’s Lee McLean and Tony Battaglene.