SYDNEY, AUSTRALIA — An Australian grain industry report, Grains NTM Project, has identified that non-tariff measures (NTMs), particularly maximum residue limits (MRLs) and technical barriers to trade continue to be a major focus for the Australian gain industry, increasing the compliance risk and cost of doing business, and in some cases, inhibiting access to markets.

NTMs is a general term that describes government regulatory tools and policy measures, other than tariffs, that have the potential to affect the international trade in goods.

“Market access is critical for the Australian grains industry,” said Luke Mathews, general manager of policy and research at GrainGrowers. “Despite the grains industry facing very challenging seasonal conditions, the industry remains export focused and is a major contributor to Australian farm sector exports. Continued and improved market access is essential for the future success of the industry and grower profitability.”

Pat O’Shannassy, chief executive officer of Grain Trade Australia, noted that successive Australian governments have been highly effective in liberalizing international trade with key grains trading partners.

“Free Trade Agreements and World Trade Organization reforms have delivered a reduction in tariff rates across a range of export markets, resulting in the expansion of export market opportunities,” O’Shannassy said. “While tariffs and quotas are still important in some markets, in general they are now less restrictive and harmful for the grains sector than the emerging and growing NTMs that affect trade.”

O’Shannassy said the industry’s ability to prioritize and communicate NTMs and their impact to government has helped to focus resources to high priority areas. This report identifies over 100 NTMs across almost 20 markets, including many of Australia’s most important markets.

“NTMs have been found to affect virtually all grains, although the greatest number are for wheat, barley and canola,” O’Shannassy said. “And while smaller crops may show fewer NTMs, the impact can be significant if the NTM represents a major restriction in a major market, placing almost all of the trade for that commodity at risk.”

Tony Russell, executive manager of GIMAF, said that for the grains industry, many of the NTMs identified were Sanitary and Phytosanitary (SPS) measures, in particular MRLs.

“The industry is facing diverging and tightening MRLs in a number of markets, which is limiting export opportunities and hurting Australian grain farmers,” Russell said. “Technical Barriers to Trade (TBTs) such as restrictive import permits and certification requirements, are affecting the grains industry, while emerging NTMs include regulation of biotechnology and plant breeding of innovative products.”

Russell said the project found NTMs could be highly trade restrictive and harmful for the industry.

The impacts of NTMs can be broad and include higher operational and commercial risk for exporters, increased risk of trade bans or restrictions and increased cost of compliance.

“More than 60% of NTMs result in either increased compliance costs or risk, and around 10% restrict market access for Australian grains,” Russell said.

Matt Worrell, first assistant secretary, Australia’s Department of Agriculture, said the government and the grains industry invest significantly to assist trade and market activities.

“Most NTMs are a normal part of doing business, but government and industry must work together to address the current and future market access challenges where they form a barrier to trade,” Worrell said. “This project has been a welcome joint initiative and will help prioritize and develop a workplan for the industry.”

Mathews noted the grains industry continues to work closely with the Australian government on opportunities to practically address many of the NTMs identified.

“Addressing NTMs provides the greatest opportunity for the industry to increase trade and increase value for the industry, growers and the economy,” Mathews said. “It is critical that trade agreements, such as the Australia-E.U. agreement that is currently being negotiated, address both tariff and non-tariff barriers to trade.”

O’Shannassy commented that the grains industry had recognized the need to increase the resources that it allocates to trade and market access activities and had been proactive over the past 12 months in working with global industry colleagues to help progress regional and multi-lateral outcomes on NTMs.

“The Australian government has shown great leadership on regional initiatives through forums such as APEC and ASEAN and the grains industry has welcomed the opportunity to be part of these activities,” O’Shannassy said.

The first Grains NTM Project was prepared for and funded by the Grains and Research Development Corporation (GRDC) and the Australian Government Department of Agriculture on behalf of the Australian grains industry in March 2018. The grains industry, through the Grains Industry Market Access, Forum funded the report update in May 2019.