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Chapter 6
Australias Trade Policy
Australia has a long history of protection in the manufacturing sector where tariffs and quotas have been
used to shield domestic firms from direct import competition. Much of this protection was put in place
after Federation in 1901 when Australian governments used a policy of protection from imports to
develop the manufacturing sector through the creation of infant industries and domestic employment.
A centralised wage fixing system was also adopted to set minimum or award wages for workers in
this sector. Levels of protection were increased during the Great Depression in the 1930s to protect
domestic employment levels, with the British Preferential Tariff reaching over 30%, and the General
Tariff Rate for non Commonwealth countries rising to over 60%. These high levels of protection from
import competition for manufacturing remained in force until the early 1970s, with the effect of raising
the domestic cost structure and the price of domestic and imported manufactured goods in Australia.
Figure 6.1: Decline in the Average Rates of Effective Assistance 1989-2001 (%)
In 1983 the newly elected Hawke federal Labor government agreed with the IACs view that the scaling
back of protection would enable Australia to achieve the following potential gains from free trade:
Increased specialisation and economies of scale in production would result in a lower cost structure
for manufacturing and improve the overall efficiency of Australian industry.
A greater mix of output (from both domestic and overseas sources) would increase the quality and
quantity of goods available to Australian consumers and raise general living standards.
Increased competition between firms in the tradable goods sector (exports and import substitutes)
of the economy, and with international enterprises, would lead to lower prices and more exports.
Incentives for firms to innovate would rise through the use of the latest cost reducing technology
(including information and communications technology or ICT) to increase competitiveness.
The Hawke government (1983-1991) implemented a policy of dismantling industry protection on a
large scale in the 1988 Industry Statement. This change in industry policy recognised the increasing
internationalisation of the Australian economy, and the need for efficient export firms to maintain their
competitiveness in overseas markets. The government argued that the reduction in protection would
have both microeconomic benefits for the manufacturing industry as well as macroeconomic benefits
for Australia. The 1988 Industry Statement phased in cuts to protection over four years, with the
protection of manufacturing falling from an average of 15% in 1989 to 10% by 1993-94 and then to
5% in 2000. This reduction in the level and rates of protection manufacturing is shown in Figure 6.1.
QLD -- 59 -- 59
SA 97 333 -- 430
WA -- 115 -- 115
TAS 30 8 -- 38
The textiles, clothing and footwear (TCF), passenger motor vehicle (PMV) and steel industries were
exempted from these cuts in protection (see Figure 6.1). They were put on separate industry plans,
designed by Senator John Button, to introduce a gradual phasedown of tariff and quota protection,
giving employees and management in manufacturing firms time to restructure and minimise transitional
costs such as structural unemployment and the retraining of workers. These industries had three years to
facilitate plans for structural change in order to receive continued support from the government. This
allowed time for resources to be reallocated and a process of voluntary redundancies to be implemented
as summarised in Table 6.2. Around 6,373 retrenchments were planned by 1991, reflecting a loss of
jobs in major Australian industrial regions where the TCF, PMV and steel industries were located.
The 1991 Industry Statement was introduced by the Hawke Labor government to accelerate the pace
of tariff reform in Australia by announcing the following new measures:
The reduction of the majority of tariffs to 5% by 1996;
The abolition of import quotas for PMV and a reduction in tariffs for PMV to 15% by 2000;
The abolition of import quotas for TCF in 1993, and a reduction in tariffs to a maximum of 25%
by the year 2000; and
The exemption from sales tax of a wider range of business inputs used by manufacturers, farmers
and miners. The intention of this policy was to eliminate any taxes on export industries.
The Howard government, elected in 1996, was committed to Labors previous tariff reforms. It cut
tariffs for PMV products to 15% in 2000, and these tariffs were frozen until January 1st 2005, when
they were cut to 10%. Automotive tariffs of 10% were reduced to 5% in January 2010, and would
stay at this level until 2015. The Automotive Competitiveness and Investment Scheme (ACIS) was
introduced in 2001 to provide transitional assistance to the automotive industry during the move to a
lower tariff environment. However ACIS was scaled back after the decision by Ford, General Motors
and Toyota to shut their car plants over 2016-17 and leave the industry. Tariff protection for the TCF
and the PMV industries had been reduced to an average 6.7% for TCF and 7.9% for PMV by 2014-
15. Australian tariffs were an average of 4.1% for manufacturing and 2.5% for agriculture in 2014-15.
The benefits from reduced protection were estimated by the Productivity Commission (PC) as a gain
of $4b in GDP for Australia through additional export volumes and a higher rate of economic growth.
Figure 6.2 illustrates the significant reduction in tariffs for all manufacturing industries in the 1990s
in terms of both nominal and effective rates of assistance compared to the levels that prevailed in the
1960s, 1970s and 1980s. Large disparities between certain industries were also removed such as those
between the highly protected TCF and PMV industries, compared to manufacturing as a whole.
Two measures of industry assistance or protection include the nominal and effective rates of assistance:
1. The nominal rate of assistance is the percentage difference between the price the domestic producer
receives with protection and the price the producer would receive in the absence of protection.
2. The effective rate of assistance is the amount of protection expressed as a percentage of the domestic
value added to production. This is a more accurate measure of the protection of domestic industry
from imports which is used by the Productivity Commission (PC) and is shown in Figure 6.2.
The reasons for the change in government industry assistance policy in the 1980s and 1990s were to:
Raise the competitiveness and efficiency of Australian industry, especially the tradable goods sector;
Increase the rate of economic growth through structural reform to industry. By reducing the cost
structure of industry this would improve technical, allocative and dynamic efficiency; and
Encourage higher levels of productivity and technology industries (i.e. sunrise industries) to
increase their export shares, especially in the fast growing Asian market and other global markets.
Figure 6.2: Average Rates of Effective Assistance for Manufacturing Industries
1968-69 to 1996-97 (%)
Source: Productivity Commission (2015), Trade and Assistance Review 2013-14, Melbourne
Tariffs have direct effects on the returns received by Australian producers. Tariffs on imported goods
increase the price at which these goods are sold in the Australian market and allow scope for domestic
producers of similar products to increase their prices. Tariffs also increase the price of goods that are
used as inputs and penalise local industries. The Productivity Commissions revised series of tariff
assistance on outputs was $7.82b in 2014-15 (see Table 6.3) compared to $8.07b in 2010-11. The fall
in assistance on outputs reflects reductions in tariffs on motor vehicles and parts, and TCF products
in 2015 to 5%, and lower output in tariff assisted activities such as metal products, food, beverages,
tobacco, petroleum, coal, chemical and rubber products. The estimated cost penalties to user industries
of tariffs was -$7.5b in 2014-15. After deducting the tariff input penalty from the output assistance,
net tariff assistance was estimated to be $302m in 2014-15, a substantial decline of 78% since 2010-11.
Source: Productivity Commission (2016), Trade and Assistance Review 2014-15, Melbourne.
Table 6.4: Coverage of Multilateral Trade Rounds by GATT and the WTO
of GATT rounds. The Uruguay round in 1994 also led to the first reduction in agricultural protection
and new agreements on trade in services, investment and intellectual property. Significant progress was
made in advancing the long running Doha round of trade negotiations at the WTO Ministerial Meeting
in Nairobi, Kenya in December 2015 where countries agreed to abolish all government subsidies to
farmers, including export subsidies. This was to be effective immediately for developed nations with
developing nations to follow by 2018. Multilateral trade reform in the WTO remains the most effective
way to improve national and global welfare compared to preferential agreements which can discriminate
against non parties to those agreements and lead to trade diversion rather than trade creation.
At a regional level Australia was a founding member of the Asia Pacific Economic Co-operation (APEC)
forum in 1989 which is a multilateral regional trade forum (rather than a trade bloc or free trade
area). APECs 21 members include the advanced countries of the USA, Japan, Australia, New Zealand,
Canada, Brunei and Chile; the NIEs of Singapore, South Korea, Taiwan and Hong Kong SAR; the
developing nations of China, Indonesia, Thailand, Malaysia, Philippines, Vietnam, Mexico, Papua New
Guinea and Peru; and the transition economy of Russia. APEC is a discussion forum on trade policy
issues and has developed mechanisms for closer trade and investment links in the Asia Pacific region.
APEC is a powerful forum representing 2.7b people, 55% of world GDP and 44% of world trade.
The APEC Bogor Declaration was an agreement signed by APEC leaders in 1994 in Indonesia to
dismantle trade barriers by 2020. At the APEC meeting in 2009 in Singapore, leaders responded to
the Global Financial Crisis by rejecting any moves towards increased protectionism, and strengthening
trade and investment links within the APEC region (i.e. regional economic integration). Support was
also given to finalising the WTOs Doha round of trade talks, and working towards a Free Trade Area of
the Asia Pacific (FTAAP) with an expanded membership of countries. Average tariff levels across APEC
members were estimated by the Productivity Commission to have fallen to 3% in 2004.
The main advantage of APECs approach to economic integration and trade liberalisation is that it is
based on open regionalism where reductions in trade barriers take place on a non discriminatory basis
by liberalising trade between members, but not discriminating against non APEC members. In this
way APEC initiatives are consistent with the WTOs guiding principles for free trade. APEC leaders,
ministers and senior officials met in Beijing, China in November 2014 which was the 25th anniversary
of APECs founding. The theme of the meeting was Integrated, Innovative and Interconnected Asia.
The APEC leaders meeting in November 2015 in Manila, the Philippines, had the theme of Building
Inclusive Economies, Building a Better World, with a renewed focus on achieving the Bogor Goals.
Source: Productivity Commission (2014), Trade and Assistance Review 2013-14, Melbourne.
REVIEW QUESTIONS
AUSTRALIAS POLICIES TOWARDS
PROTECTION AND FREE TRADE
1. Why did the Australian government use a policy of industry protection for much of the twentieth
century? Refer to Table 6.1 and Figure 6.1 and discuss the changes in the levels of protection in
manufacturing from the 1980s to the 2000s as the Australian government reduced protection.
2. Why did the Australian government implement policies to reduce protection in 1988?
3. What measures were taken in the 1988 and 1991 Industry Statements to dismantle the protection
of Australian manufacturing? Refer to Table 6.1 and Figures 6.1 and 6.2 in your answer.
4. What are the plan industries? Why were they given more time to adjust to lower levels of
protection? What adjustment costs did plan industries face? Refer to Table 6.2 in your answer.
Discuss recent trends in reducing protection from the text, Figure 6.3 and Table 6.3.
5. Distinguish between Australias unilateral, bilateral, regional and multilateral policies to promote
free trade in the 1980s, 1990s and 2000s.
6. Explain the advantages and disadvantages of multilateral trade agreements (such as the WTO
and APEC) and bilateral trade agreements (such as ANZCERTA and AUSFTA) to Australia.
The costs to Australia of reducing its barriers to trade have been confined to the short run, with
uncompetitive industries contracting and unviable firms going out of business. Lower employment
levels have occurred in the TCF, PMV and steel industries which have experienced restructuring and
rising levels of structural unemployment. Structural adjustment has also led firms to introducing the
latest technology and they have tended to substitute more capital for less labour to achieve higher
productivity, and this has resulted in redundancies and the retrenchment of many workers in plan
industries. According to the Productivity Commission (2012), between 1996-97 and 2010-11, $22b
in budgetary assistance was allocated for structural adjustment in industry. In addition, direct assistance
has been given to displaced workers through the social security system and training programmes.
Other costs of reducing protection include the effects on regional economies dependent upon
manufacturing industries for employment and support services. Cities such as Geelong, Newcastle,
Whyalla, Elizabeth, Melbourne, Port Kembla and Wollongong have high levels of structural
unemployment because of structural change in the PMV, TCF and steel industries. The Australian
government is responsible for labour market adjustment and provides funds for the retraining and
relocation of the structurally unemployed in the federal budget. This adds to federal government
expenditure, but is an important means of retraining displaced labour, providing displaced workers with
income support, and helping them to find new employment. The Productivity Commission estimated
that $140m had been spent on regional adjustment funds between 1996-97 and 2010-11.
Overall Australia has improved its economic performance by dismantling protection unilaterally and
pursuing free trade objectives through multilateral trade forums such as the WTO and APEC. The
long run economic gains from reducing industry protection more than outweigh the short term costs
of adjustment borne by particular industries such as the car, steel and TCF industries. These benefits
include increased exports, lower consumer prices, more employment in growing industries and higher
domestic incomes. In addition, many of Australias major trading partners (such as China and ASEAN)
have also lowered their tariffs. The long term gains of reducing Australian protection are the following:
An improvement in international competitiveness of export and import replacement industries;
Improving the efficiency of the allocation of the economys resources and lowering inflation;
Diversifying the economys export base, with less dependence on agricultural exports; and
Supporting the microeconomic reform agenda which seeks to raise multifactor productivity.
The GATT agreement on trade related investment measures (TRIMS) related to direct investment
guidelines for industrial and emerging economies, and the relationship between multinational
corporations (MNCs) and host governments.
The GATT agreement on trade in manufactured goods led to tariffs being cut by 15%, and a
further undertaking was made to review tariff levels at the Millennium Trade Talks in 2000.
In macroeconomic terms, the projected benefits to Australia of the Uruguay Round measures suggested
increased output and faster growth in export volumes than import volumes for most sectors of the
economy. Capital investment was also projected to rise in all sectors.
At a global level, Australias commitment to internationalising its economy through tariff reform enabled
it to play an important and credible role in promoting policies for free trade at the Uruguay Round of
GATT. The main outcomes of the Uruguay Round for Australia were threefold:
1. The scaling down of agricultural subsidies in the EU and USA.
2. Governments that subsidised agriculture were forced to adhere to WTO rules on agriculture.
3. Increased market access for trade in services was a boost for Australias service exports.
The Uruguay Round also led to the replacement of GATT by the WTO in 1995, as a permanent forum
for trade negotiations. The WTO was given greater powers to monitor and control world trade:
The WTO has powers extending to goods, services and intellectual property rights;
The WTO has greater power to limit the use of anti-dumping actions;
The WTO can use sanctions to resolve trade disputes; and
The WTO can restrict government support for industry through control over subsidies.
In agriculture, the elimination of agricultural export subsidies is on the WTO agenda for the first
time ever. The negotiations will hopefully deliver major cuts in domestic subsidies and also open
up agricultural markets where tariffs are much higher than for manufactured products.
In services, the negotiations will pursue more open conditions for trade in services such as
professional services, transport, finance and communications.
Australia is against the use of geographic indication protection currently given to wine and
spirits, and which may be extended to food. This would prevent Australian exporters from using
terms such as champagne or kalamata olives in export markets.
Australias unilateral reductions in protection have imposed short term costs on the economy
but in the long term, Australia is well positioned to take advantage of world economic growth
sourced from cuts in global tariff and non tariff barriers through the WTO process of more
countries reciprocating by liberalising their trade regimes.
The next WTO Ministerial Conference was held in Hong Kong in December 2005 with agreement
reached on an end date for agricultural subsidies, the structure for reductions in trade barriers for
agricultural and industrial goods, and an end date for reducing regulations over trade in services.
Further negotiations took place in Geneva in 2006 but the talks became deadlocked over loopholes
aimed at reforming world trade in agriculture.
Trade negotiations in the Doha Round recommenced formally in early 2007 with the Director General
of the WTO, Pascal Lemy, calling for intensive discussion and negotiations by the WTO Trade
Negotiations Committee in September 2007 to conclude the ninth Doha Round of trade talks.
The July 2008, April 2011 and December 2011 Meetings in Geneva
Some progress was made towards concluding the Doha Round in 2007 and 2008 with ongoing
negotiations between the Group of 6 (G6) of Australia, Brazil, the European Union, India, Japan and
the United States. Progress needed to be made on the triangle of trade issues:
The US would have to agree to deeper cuts in its domestic farm support;
The European Union would have to agree to increased agricultural market access through greater
tariff cuts in agricultural products; and
Developing countries such as China, Brazil and India would have to agree to lower tariffs on non
agricultural goods.
In July 2008 another WTO Ministerial Council meeting was held in Geneva to work towards the
conclusion of the Doha Round. The goal was to agree on the modalities (i.e. the formulas and
methods) to be used to cut tariffs and agricultural subsidies. Agreement on modalities would determine
the scale of reductions in tariffs on thousands of industrial and agricultural products and future levels of
Source: Productivity Commission (2013), Bilateral and Regional Trade Agreements, Draft Report, Melbourne.
farm subsidies in WTO member countries. However the talks collapsed after nine days of negotiations
eventhough 18 of the 20 topics discussed were agreed upon. Commentators argued that the increasing
power of China and India had swayed the talks with their refusal to reduce their farm subsidies because
of global food shortages and the threat of increased imports from other countries.
The WTO Trade Negotiations Committee met in Geneva in April 2011. The WTO Director General,
Pascal Lemy warned that unless the Doha Round was completed there would be a lost opportunity to
boost world trade, increased protectionism and an erosion of faith in the multilateral trading system
under the WTO. The eighth Ministerial Conference of the Doha Round was held in Geneva in
December 2011 with leaders of the G20 and APEC calling for a fresh approach to negotiations. This
included the possibility of adopting the Doha drafts as they stand eventhough they are short of the end
point envisaged when the Round commenced. It was argued that at a time of low growth in Europe
and the USA the trade benefits offered by the Doha drafts would still be valuable to WTO members.
Because of the slow progress in finalising the Doha Round, Australia has followed the global trend of
negotiating and signing preferential trade agreements (PTAs) with many of its major trading partners.
The number of PTAs in the world grew dramatically from nine in the 1960s to over 300 in 2010 as
shown in Figure 6.6, with over 40% (or 150 PTAs) of the world total in the Asia Pacific region.
Since 2003 Australia has signed bilateral agreements with Singapore, Thailand, the USA, Chile, ASEAN,
Malaysia, Korea, Japan and China. Negotiations have been held on future bilateral agreements with
the UAE, India and Indonesia. If Australia concludes PTAs with all of these countries, it is estimated
that over 60% of Australias two way trade will be covered by preferential arrangements. The Australian
government argues that PTAs which are comprehensive in scope and coverage can complement and
provide momentum to Australias wider multilateral trade objectives in the WTO.
However an eminent panel of trade policy experts in the WTO believes that PTAs can involve a number
of costs, including the diversion of trade from the most efficient countries and an undermining of
support for more ambitious multilateral trade reform in the WTO. Despite the deadlock in negotiations
in the Doha Round, the WTO remains fundamental to a global rules based trading system.
The WTO Bali Meeting in 2013 and the Nairobi Meeting in 2015
Sharp declines in world economic activity and global trade flows caused by the Global Financial Crisis in
2008-09 placed increasing pressure on governments to provide substantial domestic assistance packages.
However countries in the G8 and G20 warned of the risks of a re-emergence of global protectionism
and remained committed to making progress in trade negotiations to finalise the WTOs Doha Round
by 2010. The WTOs Ministerial meeting in December 2008 was cancelled because of the Global
Financial Crisis and the lack of agreement on modalities for agriculture and industry market access.
At the December 2011 WTO meeting in Geneva there was a shared view that the key for unlocking
the current impasse in the Doha Round was the balance in contributions and responsibilities between
emerging and advanced economies. The ninth WTO Ministerial Conference of the Doha Round was
held in Bali in December 2013 where a package of measures such as the Agreement on Trade Facilitation,
reforms to agricultural trade, and measures to assist the trade of developing countries were agreed upon.
The tenth WTO Ministerial meeting was held in Nairobi, Kenya, in December 2015. After days of
negotiations an historic agreement was reached to abolish agricultural subsidies by 2018. The WTOs
Director General, Robert Azevedo, said this would especially benefit developing countries. The removal
by 2018 of distortions that subsidies cause in agricultural markets will benefit farmers and exporters
in developing and developed countries that do not receive subsidies. Other measures adopted at the
Nairobi conference were the elimination of export subsidies on cotton; greater market access for cotton
products from developing countries; preferential rules of origin for LDCs and preferential treatment for
LDC services providers; and measures to improve food security through public stockholdings.
REVIEW QUESTIONS
THE BENEFITS AND COSTS OF REDUCING PROTECTION
AND THE IMPLICATIONS OF INTERNATIONAL PROTECTION
1. Discuss the impact of Australias unilateral reduction in protection on competition, productivity
and efficiency for previously protected firms and industries.
2. Discuss the estimated macroeconomic benefits to Australia of the reform of industry assistance.
3. Explain the costs of reforms to industry assistance to firms and workers in industries and regions
affected by tariff cuts and the abolition of quotas such as TCF, PMV and steel.
4. How does tariff reform affect consumers, firms and the government? What are the long run
economic gains from the reform of industry assistance?
5. Why does Australia participate in the WTO? What are the effects of EU and US agricultural
subsidies on Australian exporters?
6. What were the main positive outcomes of the Uruguay Round for Australia?
7. How the does the WTO differ from the GATT mechanism for liberalising world trade?
9. Discuss the progress made in trade liberalisation at the Nairobi meeting of the WTO in 2015.
10. Define the following terms and abbreviations and add them to a glossary:
Paper products 6% 2% 7% 2%
Refer to the table above of nominal and effective rates of assistance for Australian
manufacturing for 1991 and the forecasts for 2000 and answer the following questions. Marks
2. Discuss TWO reasons for the Australian government reducing protection in 1988. (1)
3. What is the difference between the nominal and effective rates of protection? (2)
5. Explain TWO costs and TWO benefits of reducing protection in the Australian economy. (4)
The Commission has previously raised questions about the merits of trade agreements. The
overall conclusions are as follows:
Multilateral trade reform offers potentially larger improvements in national and global
welfare than a series of bilateral agreements. While the slow progress of the Doha Round of
multilateral trade reform has accelerated preferential agreement making, the trade diverting
effects of bilateral agreements should not be forgotten.
Australia gains more from reducing its own tariff barriers than from the tariff reductions of a
bilateral trade agreement partner.
The benefits of increased merchandise trade emanating from bilateral trade agreements
have been exaggerated.
Different and complex rules of origin in Australias preferential trade agreements are likely to
impede competition and add to the costs of firms engaging in trade.
The nature and scope of negotiating concessions should be assessed from a national
structural reform perspective before entry into negotiations, rather than primarily for export
opportunities. The text of proposed trade agreements should be made public and a rigorous
analysis independent of the negotiating agency published with the final text.
Source: Productivity Commission (2016), Trade and Assistance Review 2014-15, Melbourne.
Discuss the main elements of the Australian governments trade policy and evaluate the costs
and benefits of Australia pursuing bilateral free trade agreements at the expense of multilateral
trade agreements through the WTO.
CHAPTER SUMMARY
AUSTRALIAS TRADE POLICY
1. Australia has a long history of protection in the manufacturing sector where tariffs and quotas have
been used to shield domestic firms from import competition.
2. Since the early 1970s both nominal and effective rates of assistance given to manufacturing have
been cut by the Australian government. Cuts in protection were undertaken in the 1988 Industry
Statement, followed by the 1991 Industry Statement, which accelerated the pace of tariff reform.
Further cuts in tariffs were made by the Australian government in 2005, 2010 and 2015.
3. The main reasons for the change in government policy towards reducing protection were to increase
the efficiency and international competitiveness of Australian industry, and to increase economic
growth through a process of structural reform in industry.
4. The short term costs of the reduction in protection for Australian manufacturing are an increase in
structural unemployment in plan industries (such as textiles, clothing and footwear, passenger motor
vehicles and steel) and the resources needed to finance retraining, relocation and redundancy
schemes for displaced workers in these industries and industrial regions.
A
unilateral decision was taken in the 1980s, 1990s and 2000s to dismantle protection and
open up the Australian economy to import competition, especially in manufactured goods.
O
n a bilateral basis, Australia has negotiated a number of free trade agreements with countries
such as New Zealand, Thailand, Singapore, the USA, Chile, ASEAN, Korea, Japan & China.
On a regional basis Australia has signed the ASEAN-Australia-New Zealand Free Trade Area
Agreement or AANZFTA (2009) and Trans Pacific Partnership Agreement or TPP (2015).
O
n a multilateral basis, Australia is a vocal proponent of free trade in the World Trade Organisation
(WTO) rounds of trade talks (such as the Uruguay and Doha Rounds), and forums such as Asia
Pacific Economic Co-operation (APEC), ASEAN and the G20.
6. The major benefits of the reduction in protection in Australia include a more competitive and
efficient manufacturing sector which exports to the world market and contributes over 20% to
Australias merchandise exports. Other positive outcomes include employment gains in efficient
industries, and at the macroeconomic level, a higher rate of economic growth has been achieved.
The major short term costs of the reduction in protection in Australia have been a rise in structural
unemployment and structural change in affected industries. Many regional economies have
also been affected through the contraction of previously protected industries. The Australian
government has also financed the cost of retraining and the relocation of displaced workers.
7. The extent of international protection has an adverse impact on Australian exporters. This is
especially the case for agricultural exporters who compete with subsidised wheat, dairy, beef,
sugar and rice in European, American and some Asian markets such as Japan and South Korea.
Australia has played an active role in the Cairns Group of countries and the WTO forum to
achieve reductions in agricultural subsidies which distort world agricultural prices, deny market
access to efficient exporters like Australia, and reduce export income for Australian farmers.
The current Doha Round of WTO talks has the major objectives of reducing protection of
agricultural and manufactured goods as well as services. The Doha Round was progressed at
the WTO meeting in 2015 in Nairobi with a decision to abolish agricultural subsidies by 2018.