BUILDING a new Bonded Free Trade Zone in China to bolster Australian agricultural exports has been welcomed by farming and political stakeholders but they want more detail on the big picture initiative mooted by mining magnate Andrew “Twiggy” Forrest.
Mr Forrest unveiled the bold China BFTZ plan with Fairfax Media last week as 1000 leading Australian business including agricultural operations participated in the Australia Week in China program along with political heavyweights.
The agri-trade zone would help channel high-quality Australian farm produce into the shopping baskets of Chinese customers via common logistical networks, streamlined biosecurity clearances and other leverage opportunities.
Trade and Investment Minister Steven Ciobo said he was interested to read about Mr Forrest's support for development of the industrial park to be situated at Zhoushan in Zhejiang Province.
Mr Ciobo said the China-Australia Free Trade Agreement (ChAFTA) had established preferential access for Australia and provided an important competitive edge in the Chinese market, for local products, by cutting tariffs.
But he said the federal government still welcomed innovative ideas that might expand the opportunity for high-quality, safe and competitively-priced Australian produce to be consumed in China.
“Time will tell regarding whether it will add to the ChAFTA,” he said.
Under Mr Forrest’s plan, the BFTZ would co-locate food testing and processing facilities with storage warehouses to facilitate speedier customs clearance processes while providing favourable tax policies.
Its initial focus would support live cattle exports, chilled beef and lamb, seafood and other high value-added agricultural products like grains, in the future.
Mr Forrest wants food products packaged or processed in the BFTZ to also be stamped with the “one brand one logo” of his ASA100 initiative, involving prominent Chinese and Australian agri-business leaders.
He said early talks about the concept had been promising and he also wrote to members of federal parliament last week to push for Australian government support.
Mr Ciobo said he’d read that letter but had not yet spoken to Mr Forrest about his idea however good discussions were held about it between officials from both countries, leading into Australia Week in China.
During the event in Beijing, a Memorandum of Understanding was signed between the government of Zhejiang and Austrade to support the industrial park’s development.
Mr Ciobo said under the MoU, Austrade would provide support to Australian companies seeking to trade and operate within the park and provide support to appropriate Zhejiang enterprises, seeking to invest in Australia.
“This support is consistent with Austrade’s mandate to deliver services to Australian companies seeking to engage internationally,” he said.
National Farmers Federation President Brent Finlay said his group was interested in anything that improved agricultural export trade and product branding, to benefit producers but wanted more detail on the nuts and bolts of Mr Forrest’s proposal.
“We’re interested in anything that helps to facilitate faster, streamlined movement of Australian agricultural freight; especially perishables which are time sensitive in terms of when they’re harvested and sold at market,” he said.
Mr Finlay said the NFF also understood similar trade zones already existed in China which helped expedite agricultural trade and needed to be considered.
He said the NFF had initially been involved in the ASA100 concept which set out to achieve “high gains” and was on its advisory board but had not yet received a debriefing on the BFTZ development.
Mr Finlay said the NFF also supported a farmer-owned brand for Australian farm exports but was unsure how strong the ASA100 membership was and needed to continue talks on that initiative.
Queensland LNP Senator Matthew Canavan said the free trade zone was “extremely exciting” and would assist Australian agricultural producers who face trade issues, beyond the FTA, particularly on a provincial basis in China.
He said China consisted of many countries – not just one and comprised “huge provinces” and the special economic zones, for the agricultural processing sector, “really could be a game changer”.
“It's often not those tariffs - it's getting access and facilitating your product through port quickly,” he said.
“If we can get our goods (into China) better, quicker and cheaper, that's going to be a huge boom for Australian agricultural producers.”
Senator Canavan said Australia considered itself situated part of the Asian region but also had to remember Beijing was actually closer to Berlin, than it is to Brisbane.
Mr Turnbull said China had 1.4 billion people and two-way trade was currently valued at $150b and early export gains under ChAFTA signed in late 2014 had been “extraordinary”.
“Beef and dairy exporters have captured the headlines, but they are closely followed by the cherry farmers of Tasmania, the cray fishermen of Geraldton and wine producers across the country,” he said last week in China.
Australian agricultural trade to China has climbed from $9.162 billion in 2013 to $10.75b in 2015 with that figure expected to climb, due to tariff cuts on commodities like beef and horticulture under the ChAFTA.
The new trade zone would be known as the Sino Australia Free Trade Industrial Park near China’s biggest city Shanghai and sit alongside the Ningbo-Zhoushan deep water cargo port; one of the world’s largest.
It’s understood an initial $600 million (3b RMB) commitment has been made but the development would need at least $2b (10b RMB) in construction.
Chinese agribusiness giant New Hope Group has committed to the new trade zone producing products that only carry the ASA100 brand.
Mr Forrest and ASA100 co-Chair Business Council of Australia CEO Jennifer Westacott welcomed Mr Turnbull’s witnessing of the MoU signing last week, saying the trade zone would dramatically improve the efficiency of Australian food exports into China.
“The significance of this free trade zone cannot be over stated,” Mr Forrest said.
"This is an extraordinary opportunity for all Australian producers who want to reach deep into China and get their product onto the shelves across that country quickly and efficiently.”
Ms Westacott said Mr Turnbull witnessing the MoU’s signing was a historic moment that showed the initiative’s importance to the agri-food sector and economy more broadly.
Mr Forrest said the ASA100 “one brand-one logo” campaign was aimed at attracting Chinese consumers to Australia’s pristine products, as the world’s most reliable supplier of safe premium agricultural food products.
“The BFTZ is a very innovative concept that’s great for China and great for Australia and potentially the most meaningful, solid development, given both countries are continuing to encourage it, to come out of the ChAFTA to date,” he said.