The new TPP trade agreement is out in public view and it really shows the stamp of the minor coalition party the Nationals.

Our zero tariffs commitment on manufacturing goods has allowed unprecedented access for our farmers, even potentially shifting aside concerns about some of our adulterated foodstuffs into some once reticent markets.

One of the beneficiaries has been the dairy industry with headlines like these everywhere;

“China free trade agreement expected to tip billions into Australian farms, dairy industry to be popular with investors”

But along with it comes some pretty hefty rules on free trade quite dramatically limiting the ability of governments to intervene in trade related matters.

The recent baby formula shortages begs the question, when push comes to show and the needs of the huge number of affluent households in China start to constantly impact the stocks of the Australian product how long will it be before the less affluent here are forced to buy an imported Chinese product? The reason of course for the demand of the Australian formula from Chinese buyers is the understandable concerns over adulteration of the Chinese product.

When this happens, and it will, how will the government manage the inevitable unrest? Will it be Hockeyesque, calling for people to work harder to afford the Australian made formula? Or will it be to highlight the other benefits to Australians of the free trade agreements and tell them to live with it?

Will it wash?

Interesting times.

SteeleRedux. the other potential huge problem could be our fresh meat.

Just imagine the knock on effect if we see increased prices for fresh food, and the GST is increased by 50% and placed on fresh foods.

We already sell our resources to the highest bidder while paying high prices ourselves, so why not food i guess.

Dear rehctub,

You wrote;

“We already sell our resources to the highest bidder while paying high prices ourselves, so why not food i guess.”

There are already far more millionaire households in China than there are Australian citizens.

There will come a time, and I suspect within the next few years, that Chinese produced baby formula will go on sale on Australian shelves to service the needs and budgets of our less well off. The 'premium' Australian product will mainly go to service the rapidly growing Asian market and to locals with the wherewithal to pay the high, demand driven prices.

All this in the so called 'lucky country'.

Is your response going to be a shrug of the shoulders and a tip of the hat to the Gods of laissez faire capitalism? We most certainly have had our disagreements in the past but I wouldn't have thought you were one for taking this on the chin.

Steel

You appear to be under the impression that government is a corrupt protection racket. While it certainly has explaining power, I don't think you should be shamelssly promoting that view.

Steel, i've always had a beef about farmers, on the one hand chasing the almighty export dollar, while on the other, sticking their hand up for tax payer support when the chips are down.

Perhaps this is an opportunity to say to Aussie farmers, "if you chase the export dollar through the FTA", then you will be ineligible for tax payer funding should you fall on tough times. Then, the dollars that would have gone towards relief funding could perhaps be used to subsidize local formula and other foods for the not so well off Aussies.

The Chinese are buying products from us at multiples of the cost of production.

Somehow this is a bad thing.

Given this price signal, I'd be surprised if manufacturers weren't already planning how to produce more of this high yielding product. More sales for farmers, more jobs in manufacture, transport, the export sector.

Somehow this is a bad thing.

Talk about greens & the left wanting continual handouts. Now the poor bloody farmer, [& the processor of farm goods], should sell his produce at a reduced price, in case some dole bludger can't afford the best. Perhaps if they don't have sufficient income to buy baby food, they should not breed until they do.

Get over it Steely, we are going to need every bit of export income we can find, as the value of our mining exports diminish. With out the foreign exchange how the hell is your poor dole bludger going to get a new TV or phone to while away his idle hours.

Rather than bitch about the farmer, you should be giving thanks to him for producing exports, & Tony Abbott for getting the trade deals up & running to give us access to these markets.

I'm surprised at you too Rehctub. I expected you would recognise how increased farm productivity has reduced our cost of living. 30 years ago selling 10 steers would pay for a new Holden ute. Today it is more like 35 steers required to pay for one. Food is so much cheaper today it is ridiculous.

It is not that long ago that the food bill took 30%+ of the weekly income of average families That required eating offal like tripe, & cutting the grub out of the apple. Wouldn't it be nice if our socialists said thanks just once in a while.

Steele et al,

Every single trade deal, contract etc brings benefits while limiting governments from making arbitrary decisions on tariffs, protections etc.The live cattle trade debacle caused caused by labor is just one instance where incompetent government ruined a thriving trade and the relationship with a close neighbor.

The TPP is no different, certainty and stability in a country encourages investment and trade, and it is a small price to pay if one limits the mind farts of politicians.

Dear rehctub,

That's more like it. And I'm partial to your line of thinking on farmer handouts.

Dear mhaze,

Farmers are looking to take golden handshakes and lining up to sell to Chinese investors. Dairy companies are packaging themselves to sell themselves off to Chinese investors. Chinese dairy producers are looking to sell their products into Australia to service the 'sub-premium market'.

This is a bad thing unless you consider the free market trumps all other considerations.

Dear Hasbeen,

We get that you are the stage of life when you are furiously sucking at the teat of socialised medicine so the implications for the availability of affordable and safe baby formula is of little importance or relevance. But please understand that not only are there those for whom this is a real issue but that the type of self-centered whinging you are well known for has become a broken record.

Dear Shadow Minister,

The 'market is good and can do no wrong' mantra is a throwback that has been thoroughly discredited well before the GFC. Putting the market economy before people leads to misery and grave inequality. Governments are needed to corral, mitigate and regulate our capitalism because unfettered it is destructive and corrosive and should not be inflicted on any society without adequate controls. This is especially important now with the ability of vast amounts of capital flowing relatively freely around the globe.

Steele,

No one here is arguing for an unregulated market, the one thing that has time and again been shown to be far worse is direct government involvement and ill considered interference usually ideologically driven. The live cattle trade cock up is but one of many examples.

It is not as though laws are not already in place to protect companies and individuals against the worst excesses of incompetent governments such as the $640m that Labor had to pay as compensation for arbitrarily cancelling a contract in Victoria, or $200m that Labor had to pay in NSW for cancelling a tender.

Perhaps Labor would have had a second thought before banning the live cattle trade to Indonesia and ruining hundreds of Australian farmers, hurting thousands of Indonesians and ruining relations with Indonesia, if they were held financially responsible for the damage their incompetence caused.

Just another quick comment:

The baby formula shortage is actually yet another prime example of where undue government interference in the market is causing losses to both consumers who want the product and the companies making it.

This time the undue interference is the Chinese trade quotas that limit the import of dairy products to protect their own industry, resulting in their consumers paying up to 8x the market price on the black market, and local industry suffering reputational damage due to the shortage of its product and missing out on a market they could easily supply if they had sufficient notice.

The China FTA will go a long way to rectify this, and the TPP will do even more, if not yet for China and India.

Dear Shadowminister,

The Gillard ban on live cattle exports to 12 abattoirs in Indonesia was a just, appropriate and timely action given the extend of maltreatment that Australian beef was being subjected to. It lasted under a month.

The bans put in place by the Howard government over live sheep exports to the Middle East lasted well over a year and saw mandatory rule for vets to travel on livestock carrying ships. The ban on the once lucrative Egyptian market was never lifted and remains in place to this day.

If you sir are true to your convictions then you will condemn the actions of the Howard government, just as you have for the Gillard government, as unwanted, unneeded, unproductive and incompetent.

As to the Chinese dairy industry one of the ministry's spokesmen has already admitted the FTA will hurt Chinese farmers.

Dr Shen Giuyin, from China’s Ministry of Agriculture, spoke of the unrest within the Chinese dairy sector about that agreement;
“They don’t like it. When the free trade agreement is signed, we expect to import a lot of dairy products from Australia. I think China is sacrificing the dairy sector to promote free trade.”

The problem for us is we have no one from this government telling us when we will be feeling our pain. Only the most ardent economic rationalist would claim 'everyone gains' as you seem to be doing.

Would you like to hazard a guess?

Of course you are completely ignoring the fact that it is the 'burden' of government regulation that has allowed us to have what the Chinese think is a premium unadulterated product. Long may government regulation of this kind value add to our exports.

SR,

With all due respect the banning was of all live cattle to Indonesia (which was nearly 1m p.a.) over an unverified report by animal activists of handful of cases in Indonesia. The total ban was in place for just under a month, meant that exports restarted very slowly, even a year later were about half of what they had been before, and is only now getting back to pre labor levels

Considering the importance of the the trade both to Australia and Indonesia, it was a wild and ill considered over reaction that hurt people, animals and livelihoods in both countries and severely soured relations with Indonesia. A rational response would have been to actually investigate the issues, determine the causes and then determine an appropriate response and actions to be taken.

Secondly the comparison with the ban on sheep to the ME is disingenuous, as the scale of the breaches led to the miserable deaths of tens of thousands of animals, and the authorities were not prepared to make any changes.

With respect to the Chinese dairy industry, the damage is entirely due to shonky producers and retailers tampering with the product, thinning it out, adding colourants etc leading to the poisoning of thousands of babies.

China has already an FTA with NZ which has seen their exports soar, and is forcing the local industry to improve their standards.