OUTGOING US Embassy Agriculture Counsellor Hugh Maginnis says Australia’s stringent quarantine regime effectively bans the import of major US agricultural products like beef despite experts saying those barriers have no valid reason to exist.
Mr Maginnis spoke at the newly reformed National Rural Press Club in Canberra last night as he prepares for a return to the US later this month.
He’s spent the past four years representing the US Ambassador and Agriculture Secretary in Australia on all matters agricultural and shared some of his experiences and impressions of farming between the two nations, with the gathering.
Mr Maginnis said the close ties between US and Australian agricultural industries were “deep and broad-based” and trade had been the major area of his diplomatic interaction with the Australian government and industry officials.
He said the two countries were competitors in many third markets but also traded with each other, to an increasing degree.
Mr Maginnis said trade was “almost free-flowing” between the two countries on a bilateral basis but some barriers to access could still be eased, like those on beef imports.
He said beef was the biggest single Australian export to the US market valued at around $3 billion last year.
However, Australia’s stringent quarantine regime effectively restricts or bans the import of several US agricultural products, he said.
“There are clear grounds for opening up this market and I have continued to engage with the Australian government for the opening up of markets for US beef, fresh pork, turkey meat and a number of other products for which sanitary and food safety experts agree there is no valid reason for quarantine barriers to exist,” he said.
Mr Maginnis said Australia was the leading supplier of US beef imports in 2014 and 2015, while Canada and NZ were a distant second and third.
“It probably wouldn’t be surprising to hear that I think this could be a good reciprocal model for Australia to follow,” he said.
“While actual exports of US beef to Australia would not be particularly significant – there is a point of principle and fair trade involved here.
“Allowing imports of fresh, chilled and bone-in pork from the US into Australia would also be a step forward and I note that NZ has already taken this step without any negative impact.
“I will also note that under the bilateral FTA, Australia received additional beef quota access in 2015 and 2016, making total duty-free quota access for Australian beef to the United States more than 400,000 tonnes.
“Unlimited duty-free access is scheduled to begin in 2023.”
Mr Maginnis said the US was the world’s largest beef producer but also imported more beef than any other country.
He said US producers specialised in raising high-value, grain-fed cattle, while the type of beef imported by the US from other countries was mainly grass-fed, lean product that was then processed into ground beef.
Overall, imports accounted for nearly 14 percent of US beef supplies in 2015, he said.
Mr Maginnis said Australia and the US should be a model for freer trade in agriculture and food worldwide and while great progress had been made, more work was needed.
He said Australia presently had more than a two-to-one advantage in its agricultural exports to the US.
“In my current position, I have sought to correct that imbalance by promoting American food and agricultural products and by ensuring broader access to each other’s markets,” he said.
“The good thing about the US-Australia relationship is that we can talk about these things openly - and this promotes pathways toward viable solutions.
“We are partners more than rivals and even when we compete, we are friendly about it.
“I am sure that eventually we can open up more bilateral markets for agriculture in both countries.”
Shadow Agriculture Minister Joel Fitzgibbon was also a special guest at the event and warmly thanked Mr Maginnis for his friendship and “enormous contribution” while serving US agriculture, in Australia.
“On behalf of the Australian parliament and on behalf of (Agriculture and Water Resources Minister) Barnaby Joyce and myself we thank you,” he said.
Mr Fitzgibbon said rebuilding the Rural Press Club was also important for disseminating information about agriculture and rural affairs and cultivating and promoting debate around important issues.
“I’m always very happy to support a very, very worthy cause,” he said.
On other aspects of the relationship, Mr Maginnis said the US and Australia represented a model of cooperation in agriculture with the two countries having much in common but also “some critical differences”.
“With gross output in excess of US$330 billion for the US farm sector compared to around US$45 billion for Australia, the scale and diversity of US agricultural production dwarfs that of Australia,” he said.
“However, US agricultural output accounts for only around 1pc of US GDP, while Australian agriculture accounts for 2.3pc of Australian GDP, clearly making Australian agriculture more significant to the national economy.
“In addition, US agriculture exports of US$150 billion in 2014 accounted for approximately 20pc of total production, compared to Australia, where agricultural exports account for around 60pc of total production, meaning that Australian agriculture is three times as dependent on exports as is US agriculture.”
Ms Maginnis said the US had around 2.2 million farms compared to Australia's approximately 135,000.
“While we may differ in size and structure, the strength of our overall trade relationship is without question,” he said.
“In fiscal year 2015, US exports of agricultural and related products to Australia exceeded US$1.7 billion, while US imports from Australia totalled US$4.7 billion.
“Total bilateral agricultural trade exceeded US$6.4 billion, which equates to about $8.5 billion in Australian dollars at current exchange rates.
“Top US agricultural exports to Australia include pork, dairy, fruit, nuts, forest products, distilled spirits and prepared food.
“Leading Australian exports to my country include beef, wine and beer, sugar, dairy and intermediate products.”
Mr Maginnis said US companies also had a long history of involvement in the Australian economy, agriculture and areas of agribusiness like farm finance, technology and farm machinery.
“The benefits of US capital inflows, technology and know-how on Australian agriculture and agribusiness can be significant,” he said.
“This capital also adds to Australia’s export infrastructure and helps improve your competitiveness in international markets.
“I am sure this kind of collaboration could also be extended to the development of farmland in Australia’s north, where there is relatively little agriculture despite enormous water resources and abundant sunshine.
“In future years, I am optimistic that the US and Australian businesses will increase investment cooperation towards expanding Australia’s place in ensuring greater regional food security.”
Mr Maginnis praised Australia’s rate of adoption for some farm technologies and innovations but said progress appeared to have been held back by “excessive regulation and out-of-date views” in areas like crop biotechnology.
He said decades of research had revealed no dangers from the use of Genetically Modified (GM) crop varieties.
Many positive benefits, including drought resistance and reduced chemical use, would also enable a growing world population to be fed, on relatively less land, he said.
“In northern Australia, many GM crops would have significant advantages over traditional crop varieties,” he said.
“The Australian cotton industry is a great example of how the use of GM technology has significantly lifted production, resistance to diseases and tolerance to water scarcity.
“Chemical treatment of weeds in this industry is almost unnecessary because of the GM varieties used.
“Of course, cotton is not a food crop, but I think the record of scientific research also supports the use of GM varieties in cropping and in the food industry.”
Mr Maginnis has been in the US diplomatic service for about 30-years, was born and raised at Minneapolis in Minnesota and his family have strong, traditional ties to grain trading.