Australian food trade barriers revealed

The World Bank's World Trade Indicators (WTI) are a relatively new, but very powerful, way of describing global trade policies and regulations. Their simplified metrics help to reveal the 'big picture' that emerges from a blizzard of trade and tariff data collected by the UN and WTO. Their method is theoretically sound but—as always—has limits and perspectives that need some interpretive care.

The latest (2008) results show world trade barriers continuing to fall rapidly through 2007

Over the last decade, countries have improved many aspects of policy relevant for trade. Worldwide, Most Favored Nation (MFN) average tariffs have fallen from 14.1 percent during 1995–99 to 11.7 percent during 2000–04 and further to 9.4 percent in 2007—a decline of more than 33 percent. In addition, a substantial amount of trade is conducted at a zero MFN tariff rate (MFN-0) or through preferential trade agreements… The most recent estimates indicate that all regions and income groups have witnessed substantial real growth in trade during this time. In 2007, average real growth in trade, 7.7 percent for the world as a whole, is within the 7–9 percent growth range of the last decade.

But one result that surprises is the very high level of revealed non-tariff protection of Australian agriculture.

The World Trade Indicators database shows Australia's overall agricultural import protection to be equivalent to a uniform tariff of 36% across the sector. This is an astonishing result because Australia prides itself on having low barriers to agricultural imports. Indeed, the WTI database shows our agricultural tariff barriers equal to a uniform 1.2%. The overall result can only be due to non-tariff factors.

Quarantine perhaps? Effective bans on imports of chicken meat, fresh pork, beef, and restrictions on fresh shrimp etc from most destinations? Bans on banana imports from everywhere? Bans on apples from New Zealand? Bans on fresh vegetables from a host of countries?

If the WTI data is accurate—there's every reason to think it's close to the mark—then we are paying way over the odds for our supposed 'unique environment'.

A spreadsheet with the summary data on tariff and non-tariff barriers for all 210 countries in the WTI database, showing the level of Australian agricultural protection is available for download from the WTI website here.

Tags for this entry: trade data protection tariffs australia world bank