Global exporters and consumers would benefit to the tune of billions of dollars from the removal of import restrictions on beef, while the Australian beef industry would gain around $419 million.
This was the valuable message emanating from Stage 1 of the Magellan Project, ‘State of play and who gains‘ in global beef liberalisation, launched on industry’s behalf by Australia’s Minister for Agriculture at the Cairns Group Farm Leaders’ meeting in Punta del Esta, Uruguay, this week.
Cattle Council President, Peter Milne, said Stage 1 of the project would provide the beef industries of the world with an important platform from which to lobby for free trade.
“When complete, the Magellan Project, launched at the last Five Nations Beef Conference hosted by Australia in 2000, will provide us with a clear picture of the benefits to beef exporting nations of liberalising currently highly restrictive beef markets of the world.
“The Australian beef industry is currently hampered by tariffs and quotas to several international markets including the major markets of Japan, the United States, European Union and China. Australian specialist beef cattle producers would enjoy an average increase in receipts of around A$14,824 per property per year if all quotas and tariffs for Australian red meat exports were removed.
“Declining consumption of beef and beef products is a major issue facing beef-producing countries. The situation is aggravated as consumers are forced to pay higher prices for beef by countries limiting trade through barriers. Japanese consumers alone would save over US$8 billion through the removal of Japan’s 38.5% tariff on imported product, therefore providing them with the opportunity to increase their beef purchases with these savings.
“This project has been commissioned by Meat and Livestock Australia on behalf of the Five Nations Beef Group that comprises the Cattle Council of Australia, Meat New Zealand, Canadian Cattlemen’s Association, National Cattlemen’s Beef Association (US) and Confederacion Nacional Ganadera (Mexico).
“Cattle Council looks forward to completion of Stage 2 of this important project.”
Magellan Project: Background Notes
In 1447 Vasco De Gama made a voyage that forever changed the nature and balance of trade around the world. He was the first explorer to sail from Europe to Asia around the Cape of Good Hope. Vasco De Gama returned to Lisbon in 1499 with a cargo of spices that paid for his expedition costs 60 times over!
The value of the trade in spices was so great that in 1509 Magellan set sail to the west on a mission to find a faster route to the Spice Islands. He ended up circumnavigating the world in this pursuit. The only barriers to agricultural trade faced by Magellan and Vasco De Gama were physical barriers: the dangers of visiting hostile lands, encountering the supposed monsters of the deep or the vagaries of ancient sailing craft. World trade has come a long way since these simple beginnings, but unfortunately so too have the barriers to trade.
The five nations have been amongst the world leaders in trade liberalisation. They are large exporting nations. They are large importing nations. They advocate the dismantling of trade barriers. They advocate the freedom for enterprises to enter into commercially advantageous arrangements unfettered by the unreasonable restraints of government. They advocate the freedom for enterprises to dream the dreams of Vasco De Garma or Magellan.
[Taken from Dr Peter Barnard’s address to the Five Nations Beef Conference, 2000]
Global beef trade grew by 46% between 1985 and 1990 yet only 3% between 1990 and 2000. The value of world output over the same period grew by 40% and the value of world exports of all commodities by 84%.
Between 1990 and 2000 the US increased beef exports by 150%, Australia by 26% and South American countries (mainly Argentina, Brazil and Uruguay) by 37%.
Global beef production fell by 3% over the 1990s while poultry meat production increased 52% and pork by 25%.
Since 1990 there have been significant reductions in barriers to beef trade in some countries including:
In Japan, a 70% tariff replaced the import quota in 1991 with progressive reductions in tariffs to 38.5% now.
In Korea, a virtual import ban was replaced by a quota in 1988 with progressive increases in quota and conversion to a tariff only barrier of 41.2% in 2001.
In the US and Canada, tariff quotas replaced rigid quotas.
In the EU, subsidised beef exports were reduced by 26% as a result of the Uruguay Round but import quotas remain.
Trade barriers on beef continue to severely restrict global beef trade. They inhibit beef industry development in efficient producing/exporting countries and provide a boost to pork and poultry consumption and hence the incomes of pork and poultry producers. With consumers forced to pay too much for their beef they have les to spend on other goods and services. The result is reduced growth prospects in other industries in those countries which erect barriers against beef trade and reduced overall economic performance.