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Let's act now to preserve exports.

Australian food exports to Asia remain strong, but action must be taken to ensure trade liberalisation efforts are not diluted. JIM KENNEDY(*) comments

Rising unemployment levels and emerging populist political issues in Asia represent a potential threat to Australian food exports into the region.

Despite diversification into new markets because of Asia's economic crisis, access to Asian markets remains the most important factor governing future trade growth for the Australian food industry.

Recently, it appears as if momentum may be slowing for further gains in trade liberalisation. The recent Asia Pacific Economic Cooperation (APEC) meeting in Kuala Lumpur failed to deliver any significant trade progress, although commitment to the Bogor ideals was maintained. Japan's intransigence at APEC regarding market openings was notable.

Without continuing international support for further liberalisation, the gains Australia expects cannot be achieved.

Unemployment in Asia is a threat to trade liberalisation.

The Asian crisis has greatly increased unemployment in those countries and led to calls for fewer imports and increased support for domestic suppliers and industries.

With the increasing development of information technology, we are also seeing structural unemployment in developed countries settle at around 8 to 10 per cent.

These developments favour regional or bilateral trade agreements, where domestic employment issues become important. Employment impact considerations will increasingly drive future trade access negotiations.

Regional trading blocks are also developing on the back of populist political issues. For example, consider the likely expansion of the American Free Trade Agreement to include South American countries and the development of a trade agreement in agricultural products between South Africa and the European Community. Global trade liberalisation for agriculture is increasingly no longer seen as an imperative, and the Japanese are now testing the water to limit the impact of previous access undertakings. Rice is a case in point.

It is again timely for the government and industries to create an "Australia Inc" approach and advocate the benefits of trade liberalisation.

Target countries must be shown how they can benefit from opening market doors.

Our well-developed food trade shopping list needs frequent advocacy, as domestic issues dominate target Asian markets. Our industry and government representatives travelling to target markets must deliver a consistent message on market access priorities supported by some analysis of the benefits to the local economy. Australia's desirability as a supplier must also be made clear.

The outlook for our food exports is positive. Total food exports continue to grow above trend and sales to Asia are holding well in aggregate, despite some patchy performances.

Although the Asian crisis has cut prospects in the worst hit countries, most economies seem to have bottomed out and good selected opportunities remain.

The forces of political and economic change are afoot in much of Asia, bringing unprecedented transparency and access for product and equity.

However, some domestic programs pushing higher food self-sufficiency present access threats. Consequently, now is the time for our food industry and government to promote our food trade shopping list for Asian nations.

(*) Jim Kennedy is executive director of Supermarket to Asia.
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Publication:Business Asia
Geographic Code:90ASI
Date:Mar 15, 1999
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