Australian food manufacturers have been handed more freedom to export produce to the United States. Steven Impey considers the benefits this offers the sector.
Australia has entered into a bilateral Food Safety Recognition Agreement with the United States, which it is hoped will strengthen exports for food manufacturers between the two countries.
Similar agreements have already strengthened Australian food exports with Canada and New Zealand, which – just as the Turnbull Government hopes to achieve in trade relations with the US – moves to recognise comparable food safety regulations.
Australian food exports to the US exceed $3.7 billion annually, according the latest figures from IBIS World Australia – with meats and meat preparations contributing more than $3.4 billion each year.
The agreement, which was announced by the Department of Agriculture and Water Resources (DAWR) in April, aims to improve competitiveness for Australian food product manufacturers in the US market by reducing the number of in-country audits and placing compliance on the shoulders of the exporting country.
As it currently stands, regular onsite visits and a certain rate of import inspection is required, while further testing on the products’ arrival in the US does come at a cost.
As a result of the new agreement, Australia will apply less stringent inspection and testing of products imported into Australia from the US.
“The upshot is that this will greatly simplify Australian exports to the US through greater reliance on our national food control systems that ensure the production of safe food,” said Greg Read, head of exports from the DAWR.
“This is good for our businesses, as it positions Australia as a safe source of food supply for the US market that will place our exporters in a position of benefit compared with other exporting countries that have this agreement.
“These preferential processes will encourage trade between our two nations that can only be good news for our farmers and growing their profits.”
Not all foods are included in the agreement. However, most canned foods, seafood, dairy products, fresh fruit and vegetables, fruit juices, confectionary, baked goods and pet foods are included.
Nathan Cloutman, IBIS World’s senior industry analyst, explained which areas of Australia’s food production sector is likely to benefit most.
“As one of only three trading partners with this agreement, domestic exporters have now improved the perception of quality of Australian foods in the US market,” he said.
“The agreement is likely to boost food product exports to the US, which is particularly good news for exporters of fruit and nuts (such as oranges and almonds), vegetables (such as mushrooms), sauces, dairy products, chocolate and confectionery.
“Australia has benefited from its strong food safety processes that ensure that domestic food products are safe to eat and of a high quality.”
Domestic food producers operate under a strong regulatory environment that ensures that food is of a high quality.
For example, the Food Standards Code developed by Food Standards Australia New Zealand places strong labelling requirements on manufacturers.
In addition, all food manufacturers are required to take reasonable steps to establish whether their raw ingredients contain any genetically modified food.