Tasmanian Abalone Council Sub Council Meetings September 2014 - PowerPoint PPT Presentation

Tasmanian Abalone Council Sub Council Meetings September 2014

Abalone Royalty Negotiations – New Deed Holders • New Abalone Deed was introduced in 2005 • New Abalone Deed holders currently pay 8.125% in royalty to the Government • This is by far the highest level of royalty paid by any marine resource user in Tasmania • By comparison with other sectors: • Abalone – 8.125% ($7 million on a GVP of $85 million) • Rock Lobster – 4.8% ($3.1 million on a GVP of $65 million) • Salmon Farms – 0.1% ($450 000 on a GVP of $450 million) • The Abalone industry pays a much higher level of Marine Resources (MR) revenue compared to other sectors: • Abalone pays 61% of DPIPWE MR revenue • Rock Lobster pays 27% • Salmon pays a mere 4% • The Tasmanian abalone industry is negotiating to achieve at flat 5% royalty – this is still higher than any other sector! • In WA, all marine resources users pay a flat 5% - this was introduced by Norman Moore MHA in 2009 – a much fairer system!

New Liberal Government have agreed to bring on the necessary Legislative amendment during 2014 to reduce the abalone royalty for New Deed Holders from 8.125% to 7% commencing January 1 2015. Further discussions re additional reductions to 5% with the objective of achieving this during the current term of Government. 6% by January 2016 5% by January 2017

STAG – Past, Present and Future

Members of the STAG The Seafood Trade Advisory Group (STAG) was established to create a unified platform for representing the China trade related interests of Abalone and Rock Lobster exporters. The primary objective of the group was “ to advocate for the liberalisation and development of the direct trading relationship between Australia and China. ” Formation of the group increased industry credibility in the eyes of government demonstrating internal cohesion and a commitment to professional government relations. Importantly the STAG membership is made up of significant commercial players from the Abalone and Rock Lobster industries, assuring government information provided by the STAG is informed by ‘on the ground’ experience and market understanding.

Crisis in the Industry • State Based Approach for Industry Representation (For Market & Trade Access Issues) Challenges Description Credibility The reputation of the industry had suffered due to misunderstandings incurred during representation to government across the 2010 Chinese restriction of the HK grey trade Unity Government and department representatives indicated that a strong working relationship with the industry was challenged by the absence of a single representative body providing industry input on key trade issues Political engagement was addressed in an ‘ad hoc’ fashion by those members of industry Communicatio n with existing government relations. This led to inconsistent messaging. Evidence In the absence of a representative platform to promote the trade interests of the industries no formal research had been conducted to substantiate the needs for liberalisation of the trade – nor had the channels of communications been created to disseminate this research

Crisis in the Industry • Opportunity Existed to unite Abalone and Rock Lobster Industries. Seafood CRC already Abalone Industry Both Industries Share working with United/Working Common Issues Abalone Industry Together

Industry Snap Shot The industries The industries The combined The Australian have invested support an value (FOB) Abalone and over $5 estimated of Australian Abalone and Rock Lobster million in cash 8500 jobs in Rock Lobster Abalone and industries commitments are Australia’s regional and Rock Lobster contribute in and in kind coastal most valuable contributes excess of contributions communities edible approximately $1.25 billion in over the past across fisheries $632 million gross five years to Australia’s to the nation’s exports domestic strengthen the southern export product direct China states earnings trade

2: Government engagement • Expand government KEY MESSA KEY ESSAGES GES FO FOR IN INDUSTR USTRY ST STAKEHO KEHOLDER LDERS The industries have a plan to strengthen the direct trade  Industry is committed to work with the Australian and Chinese governments to facilitate, support and expand the legitimate direct trade platform for Australian Abalone and Rock Lobster into China.  The Abalone and Rock Lobster industries have come together to form the Seafood Trade Advisory Group to present a unified front to government.  The industries meet the highest standards of Australian accreditation (DAFF, EPBC) and are committed to building a set of reliable industry benchmarks for standards and integrity (“trustworthiness”) e.g. Australian Wild Abalone (AWA), SRL Clean and Green and Marine Stewardship Council Certification (MSC).

2: Government engagement • Expand government KEY KEY MESSA ESSAGES GES FO FOR IN INDUSTR USTRY ST STAKEHO KEHOLDER LDERS The industries have a plan to strengthen the direct trade  The industries are building the foundations for long term results for all food industries in Australia and China.  The industries have made over $5 million in cash commitments and in kind contributions over the past 5 years in strengthening the direct China trade  We are unable to protect product integrity, pursue our provenance labelling and ‘Brand Australia’ efforts because we cannot track or control our products beyond the entry point under an indirect trade.

FTA South Korea

Trans-Pacific Partnership (TPP) • There are currently 12 parties negotiating the TPP, five of which are among Australia's top 10 trading partners (Japan – 2, United States – 3, Singapore – 5, New Zealand – 7, Malaysia – 9). • South Korea have formally expressed an interest in joining the TPP. • STAG submission lodged STAG’s Position – “It is our wish to reduce and eventually entirely eliminate the customs duties of Korea for all Australian seafood products, including Abalone. As the negotiations on Australia-Korea FTA have been concluded, we hope that the TPP negotiations will ensure that further liberalisation occurs”.

Economic Partnership Agreement - Japan

Australia – China FTA Update 5 - 8 th May Canberra 20 th Round of Negotiations

Australia China FTA The industries represented by the STAG support the completion of a Free Trade Agreement between Australia and China that reduces tariffs on Abalone and Rock Lobster products to zero per cent. A comprehensive FTA that reduces tariffs to zero would increase the value of the Abalone and Rock Lobster direct trade to Mainland China from $30.4 million to approximately $600 million.

Tariff reduction will also result in: Increased competitiveness for Australian product directly traded into mainland China Increased certainty and transparency for Australian exporters directly trading with mainland buyers with legal recourse for trade disagreements and access to normal terms of trade Increased demand and market share for exporters able to promote and build brands based on Australian provenance and traceable food quality, sustainability and health standards Increased prices through unlocking new demand from currently inaccessible food and beverage customers in 2 nd and 3 rd tier cities

Barriers to Trade • Australian Abalone and Rock Lobster are taxed with an average 15% tariff and 13% VAT when entering mainland China directly. High duties •Australia’s major competitors, New Zealand and Chile both have free trade agreements with China. Free trading •As a result their Abalone and Rock Lobster industry’s are advantaged in the market competition • The existence of grey channels into the Chinese market weakens the competitiveness of Australian Grey trading Abalone and Rock Lobster product exported directly to Mainland China. • Chinese importers give preference to grey channel product as the duties levied on Australian direct competition exports often render these shipments price prohibitive. • STAG monitoring indicates that Beijing customs times are significantly behind the global standard Customs clearance period of 4 hours, and also behind the time achieved by Shanghai customs authorities. • The average customs clearance time across Shanghai and Beijing is 6 hours. In Shanghai the clearance delays average is 4 hours, Beijing is 8 hours. • The non-listing of SO2 for canned abalone acts as a trade barrier to Australian shipments of preserved Abalone that risk being impounded by Chinese customs for non-compliance. Sulphur Dioxide

FTA Outcome objectives

2014

AWA™ Program Journey Stage 3 2013- 2014 Conduct Supply Chain Stage 1 2009 -2011 Seminars Research, trial and evaluate market opportunities Action TMA Agenda Stage 2 - 2012 Develop Supply Chain Education Program Develop TMA Agenda

2013/14 AWA EVENTS IN CHINA AND HONG KONG