It’s turtles and tortoises all the way down with the Korean trade deal - via Herp Digest

Terry McCrann, Herald Sun,February 18, 2014 12:00AM

The cut to zero in the Korean tariff on freshwater tortoises will be staggered over three years. Source: News Limited

GREAT news for any exporters of Australian turtles: the Korean tariff will be slashed to zero immediately when the Free (sic) Trade Agreement kicks off.

Not such great news though, for exporters of freshwater tortoises — the cut to zero in the Korean tariff on them will be staggered over three years. And the same goes, unfortunately for, snake exports.

But even so, those exporters are far better off than Aussies selling Psittaciformes. The Korean tariff on their exports will take seven years to get to zero. It’s fortunate the average Psittaciforme does live that long.

This captures the two key elements, and hints at the third, of this and indeed all Free (sic) Trade Agreements.

First, the title is not merely a constructive but an outright and deliberate lie. If it really was a “Free” Trade Agreement, it could be done on one page. All tariff and non-tariff barriers between Australia and Korea in both directions are reduced to zero.

Truth in advertising would demand they were called at best, Freer Trade Agreements. Or, even more truthfully, Selective Freer TAs.

This points to the second element: they are laboriously and mind-numbingly detailed. We get page after intensely detailed page of what happens to the tariff on the most specific item. Even down to worms, broken into several categories.

This sort of detail is applied even to those — very many — items that we don’t and never will export. It’s good to know, that if we get into exporting whales and dolphins, the currently punitive Korean tariff on them will be cut to zero in three years.

Or perhaps that will take 10 years — there are two separate listings in the detail. Excuse me for not chasing down what differentiates them.

Combined, these first two elements hint at the third, more, if not indeed the most, important element. Korea — and all the other countries we sign these deals with — are happy to concede us free trade on exports of turtles, snakes and whales. That is to say, total irrelevancies.

But in the things that actually matter to our businesses, it’s a very different, much more hard-nosed story. In these cases the Korean tariffs don’t come down to zero immediately or even in three years, but maybe 10, 15 or even 20 years.

Indeed, in some cases it will take 20 years to reduce a punitive Korean tariff to only 50 per cent of what it is today. That is, to a still punitive tariff. While on some items, the tariff is left unchanged.

This is most strikingly the case with meat. Most of the meat categories take 10, 15 and indeed 18 years to reduce the Korean tariff to zero. The tariff starts punitive and stays punitive for years.

On the other side, in stark contrast, our tariffs come down almost entirely and immediately to zero. Including, most obviously, on Korean cars.

Sure, the cuts in our tariffs on many categories of textiles are staggered over five years. But they are so low to start with, it is really neither here nor there. We’ve just agreed a slightly longer death sentence for any local producers.

That points to two other basic realities. We have long since committed to free trade for the exports of other countries coming into Australia. So we ain’t really got that much left to “trade” in these sorts of negotiations.

This is also where academic trade theory bites the bitumen, and bites it hard. Theory tells us that it doesn’t matter whether anyone else reduces their barriers to our exports; we benefit from our own unilateral tariff reductions.

That’s self-evidently true, up to a point. We get to use other people’s exports cheaper. This is most obviously the case with cars. Both consumers and businesses are better off getting cheaper cars.

It is also pure nonsense: even if made sense on a national level; and it does not. Consider the case, where everyone closed their borders to our exports. Do you really think we would be the richest country in the world, having cut our tariffs to zero?

But it is more patently utter nonsense at the individual and business. Tell our meat producers, that they “benefit” from having cheaper cars, despite not being able to sell their meat in other countries.

Now it’s true that this FTA is probably better than all the other bilateral FTAs we’ve signed. Although nowhere near as great as Trade Minister Andrew Robb, somewhat dishonestly claimed, or as the Business Council’s Jennifer Westacott gushed.

Robb said that “84 per cent (by value) of Australia’s exports to Korea” would be duty free immediately; and tariffs on 99.8 per cent of our exports would disappear on “full implementation”.

Those two — qualifying — words in the brackets were the only meaningful honest part of the claim.

The basic truth, is that the overwhelming majority of our exports are already duty free. They are the coal and the iron ore that Korea wants, to turn into steel, to make cars, to ship back to Australia.

A trade, which let me hasten to add, is good for us, on both the selling and the buying sides. But the real increase in our trade access for our other exporters is minimal.

This also goes for the second part of the claim. Yes, almost all our exports will end up tariff-free. But only in 20 years’ time. Meanwhile it’s open sesame to Korea’s exporters — and just about everybody else’s.