Free trade the focus, as interest rates remain on hold

The National Farmers’ Federation (NFF) has today released the October NFF Agribusiness Loan Monitor which shows agribusiness rates remaining on hold against the RBA official cash rate for the fifth consecutive month. NFF Economics Committee Chair John McKillop says that although interest rates and agribusiness loan rates remain on hold, the fluctuating dollar and further evidence of a stalemate in the World Trade Organisation’s Doha Round of trade talks has placed free trade firmly back in the spotlight. “The Australian dollar has reached historic 28-year highs in the past few months, which has placed considerable strain on our export reliant industries, like agriculture,” Mr McKillop said. “While the dollar has now eased slightly, the financial impact of its movements on our trade-exposed farmers has made improving international trading environments for agricultural products an even greater priority. “But, as the NFF experienced at the Cairns Group Farm Leaders Meeting in Saskatoon just last month, resolution is looking increasingly difficult without looking at alternative pathways for the process. “This week we have seen the Minister for Trade, Dr Emerson, propose a new approach to multi-lateral trade negotiations. “The NFF is open to any process that aims to improve access to key export markets, as ensuring Australian farmers can keep pace with our major competitors is a major focus for us. While we appreciate new approaches come with risks, we understand that now is not the time to close the book on alternatives. “Free trade agreements also play a vital role in keeping pace with competitors. Our trade with Korea is one such example. Korea is already one of our biggest export markets for beef, dairy, sugar and cotton. Australia is currently in the process of trade negotiations with Korea to grow our market, and to sure up our existing foothold. “The timing on this is critical. Korea has recently ratified a trade deal with the EU, and just last week the US passed the legislation to do the same. The Korean sub-committee of the Foreign Affairs, Trade and Unification Committee is expected to endorse the trade bill today. “The pressure is on: Australia’s deal with Korea must now be finalised fast, or we will face a real disadvantage in that market. We already know that the US deal with Korea will slash our exports to that market by 12 percent by 2030, with the Centre for International Economics predicting the deal will gouge some $800 million from our agricultural exports. “That’s why it’s important we act now. We may have no control over the Australian dollar or interest rates, or their impact on our farmers, but we can provide certainty for them by cementing free trade agreements, like one with Korea,” Mr McKillop said. The October NFF Agribusiness Loan Monitor can be downloaded below or via the http://www.nff.org.au/publications.html#cat_2119[Publications page].