Agmates

Agmate Andrew Moyle Colonial Leather at Bendigo Vic writes from China:

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As for Tariffs, I have campaigned long and hard, met with members of parliament and ministers in the early days but discovered fairly quickly the futile nature of such efforts.

I own and run a factory in Bendigo that manufactures leather goods. Our main products are musical instrument straps (Guitar straps) Three years ago I came to China to set up a factory but unlike other business that move offshore, we have maintained our Australian facility with no change.

Well I say no change but over the years cheap imports have crippled our business. In its hay day we were employing 12-14 people. Now we employ 5. If it was not for the fact that I came to China, our Australian factory would have ceased completely. Because of things like fuel prices, the cost to export from Australia become so expensive that our exports went from 25% of our production to currently about 2% .

All our export to Europe and the USA is done from here in China. I figured, why let the Chinese steal our industries completely. At least I bring money back into Australia to help Subsidize the losses our Australian factory makes.

The other thing that has helped us survive in Oz is that I now piggy back purchases of certain raw material and ship them to our Australia factory, reducing raw material costs. Twenty years ago so much of our raw materials were Australian made but in the end those suppliers had shut down their factories and were supplying Chinese made raw materials but still charging Australian made pricing. Some did not even disclose to us they were doing this so we were supporting some Multi National suppliers thinking that we were still buying Australian made.

Now, in relation to Tariffs, I tried exporting product to China a few years back and my Chinese customer was being charged 30% import duty. That still exists today. Even if I wanted to import material from Australia for use in our Chinese factory we will be charged 30% duty.

Guitar straps being imported into Australia only carry 5% import duty in Australia and that is only because I jumped up and down years ago for the Government to do something.

The government are fully aware of the one sided nature of what is happening but as with most things they continue to act with total contempt of the Australian people. I do not have an issue with a level playing field but how is 5% we charge level with the 30% they charge.

The push for the reduction in tariffs and import barriers was quite simple. To maintain the illusion for a few years that the CPI and inflation were not escalating out of control, they had to replace Australian industry with cheap imports so peoples pay cheques still bought them something. That allowed them to destroy our industrial and farming sectors to comply with the new world order plans while the people slept.

The people were not awake to this then and sadly not enough are awake now. Even the few people I still employ still do not get it even after years of trying to make them politically aware. I have explained to them so many times if they hold out any hope to keep their jobs they need to wake up and even to vote for a good independent and not the party stooge but alas my words fall on deaf ears.

I have to bring myself to the realization that if they don’t want to ensure they have a job, why should I be the only one caring. And of course if and when I finally close the doors of the Australian factory, people will blame me for being an incompetent business man and a lowlife for putting people out of work and going to China.

Sadly most people will have to lose all before they come to the realization they could have done something and people like us led them to the watering hole but they didn’t drink the cup of realization. The most unfortunate thing is their stupidity will also result in our demise too.

Cheers from China

Andrew Moyle

P.S. I would offer to get stickers printed for you in China really cheaply and land them in Australia with almost no tariff but I guess that would be a little hypocritical. HAHAHAHAHA.

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First posted as a comment here. On the post – Unite NOW to bring back Tariffs and Regulation of Australian Industries, by Lyn Bennetts.

Have Your Say!

Free Trade is the deadly sniper that is methodically killing off Australian agriculture industries just as it has our manufacturing industry.

You the reader like most people probably think that’s an outrageous statement. It goes against everything we have been told for the last 30 years. The media, our politicians (Liberal, Labor & National Party) and our state farming organization have told us what a great thing free trade is for Australia and Agriculture in particular.

Well lets have a good hard look at it.

Did you know? : Australia and New Zealand are the only country in the world to comply significantly with the World Trade Organisation’s (WTO) demand that we reduce, and finally, remove all tariffs (manufacturing & Agriculture).

Did you know ? : For agriculture the 3 superpower economies, the USA, the EU and Japan have urged us to lead the world in Free Trade while making no significant reduction of  Ag import tariffs themselves. In fact they have massively increased direct subsidies paid to their farmers. Those subsidies alone are now worth more than $230 US billion a year.

What happened when tariffs were reduced and removed in Australia?

Did yoy know? : In essence, tariff reduction and removal destroyed two thirds of our family farms and one third of our manufacturing sector.

Did you know? : Altogether, the demise of tariffs; along with associated GATS, GATT and free trade agreements, has cost Australian workers about three million full time jobs .

Did you know? : Most of those affected were from rural and regional Australia (primary and support industries), and approximately one million workers and their families were forced to move to coastal cities to find work; with disastrous results for rural communities.

The speed of this demise is rapidly increasing. Free Trade has seen Australia export most of our manufacturing industries (read jobs) to Asia.

Did you know? : The recently signed ASEAN Free Trade Agreement cuts any remaining Australian Ag tariffs to zero next year whilst nearly all of the countries in the ASEAN block will not begin to reduce their tariff protection for at least a decade.

This agreement alone will see the transfer of much of our Ag production to the ASEAN nations over the next decade just as we have seen most of our manufacturing industry transferred to China. That’s what Free Trade is about.

This is straight off the WTO Web site talking about the principles behind Free Trade:

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“Comparative Advantage“

This is arguably the single most powerful insight into economics.

Suppose country A is better than country B at making automobiles, and country B is better than country A at making bread. It is obvious (the academics would say “trivial”) that both would benefit if A specialized in automobiles, B specialized in bread and they traded their products. That is a case of absolute advantage.”

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When we compete with countries that pay their labour $2 a day with little regulation they have an absolute advantage. – Under the Free Trade model we end up transferring production / manufacture to those countries that have a Comparative or absolute advantage.

Look at the UK – they are a mess because they have transfer all of their manufacturing wealth to other countries.

Look at the China / USA relationship. – China makes the stuff and the USA consumes it. The USA is massively in debt – and the Chinese have massive wealth.

Work it out for yourself – with our dollar at 65 cents if we had a manufacturing industry left we would be in a very strong financial position to take advantage of that.

We still have agriculture. The reason Ag has a good outlook is because our dollar is so low, not because of free trade.

Our low dollar is the only thing keeping our farm sector afloat. God help Australian Agriculture if the US dollar collapses.

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Have Your Say.

Australian Prime Minister Kevin Rudd and his Labor team have once again plucked the Goose that lays the golden egg – Australian Agriculture.

Labors urban boy wonder, Agriculture Minister Tony Burke announced increases in AQIS fees and full industry cost recovery that amounts to a massive tax increase of up to 1,300% on the nations rural exports.

Whilst many exporters will pass those increases straight back to rural producers it will drive a number of them out of business, destroying jobs.

At present agriculture is the shining light in the Australian economy. Not because of any great government policy present or past, but simply because we still have an Ag industry and with the Australian Dollar at 65 cents US we are competitive.

Thanks to the Free Trade policies pursued by governments of all persuasions over the last 30 years we don’t have a strong manufacturing industry, its now in China and other low cost counties. If we did still have a manufacturing industry then it too would be doing well with the dollar at 65 cents.

It is diabolical that Labor doles out $6 billion dollars to prop up Australia’s zombie Car manufacturing companies yet slugs the viable agricultural industry with a huge export tax.

Its reverse free trade, tax our exports that are then slugged a protective tariff  by the importing country.

Why does the car manufacturing need $6 billion dollars of government subsidies to survive? Because in the World of Free Trade it can’t compete with cars built in factories in China and South Korea etc.

The Australian Agriculture industry, has survived despite being the only Ag industry in the world (along with NZ) that operates without the assistance of subsidies or the protection of tariffs.

The Rudd government is obviously broke. Why else in the time of the greatest financial storm in 90 years would you slug your only growing export industry and in doing so put 1,000’s of jobs at risk.

Kevin Rudd has quoted that the $6 billion given to the car industry is to protect the 50,000 Australians that it employs. Just one sector of Australian agriculture – the meat industry employs 50,000 people. The difference is that the 50,000 employed in the car industry are in key Labor held urban seats, while the 50,000 employed in the meat industry are in rural & regional Australia and predominantly coalition held seats.

So jobs in coalition held seats are expendable. Just a mere casualty to the game of politics in Australia, cannon fodder if you like.

In many respects Australia is the luckiest country in the world. We are rich in natural resource, mining and agriculture. The only thing that ruins this country is the ruling political elite who make decisions based exclusively on getting themselves re-elected and not in the national interest.

If it does not stop Australia will end up a third world country destroyed by party politics and ego maniacs.

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Have Your Say!

The USA is pumping Billions directly into its farm sector in an effort to jump start rural & regional communities economy.

WASHINGTON, March 9, 2009 – Agriculture Secretary Tom Vilsack today announced USDA will be delivering its first actions implementing the AU$43 billion provided in the American Recovery and Reinvestment Act of 2009 (Recovery Act).

Just have a look at what Barack Obama’s government is doing just for rural communities. Lets go through it and compare it to  what the Rudd Government is doing with its $42 billion stimulate package for every Australian.

While you are doing this just remember that Australia embraces Free Trade and does not pay subsidies to its farmers or impose import tariffs on Agricultural goods.

On the other hand last year the USA paid AU$39 billion in direct subsidies to its farmers and imposed import tariffs estimated to be  indirectly worth another AU$30 billion. Total farm assistance of $AU69 billion for just over 2million farmers.

From the US Department of Ag web site.

Funding will help rebuild and revitalize rural communities as well as help stimulate local economies and create jobs throughout the country. Specifically;

• The Farm Service Agency (FSA) will use immediately $145 million of the $173 million provided in the Recovery Act for its Direct Operating Farm Loan Program, which will give 2,042 farmers – almost 50% are beginning farmers and 10% are socially disadvantaged producers – direct loans from the agency. These loans will be used to purchase items such as farm equipment, feed, seed, fuel and other operating expenses and will stimulate rural economies by providing American farmers funds to operate. Currently, farmers are struggling with the high costs of running family farms, seriously affecting beginning and socially disadvantaged producers.

• USDA Rural Development Agency will initially provide nearly 10,000 rural families with $14.9 million ($1.17 billion in loan guarantees) for homeownership financing, creating or saving more than 5,000 jobs.

• USDA Rural Development will also release funding for more than $400 million in pending applications for Water and Waste grants and $140 million in pending applications for Water and Waste Direct Loans. Rural Development expects nearly 13,000 jobs will be created by 400 water and wastewater projects.

• The Natural Resources Conservation Service (NRCS) will release up to $145 million provided in the Recovery Act to restore frequently flooded land to its natural state; create jobs in rural communities nationwide when landowners establish these floodplain easements; as well as restore and protect an estimated 60,000 acres of flood-prone lands nationwide through the floodplain easement component of its Emergency Watershed Protection Program.

The Rudd government is not offering rural and regional Australians any targeted assistance what-so-ever.

Our rural communities have been devastated over the past 2 decades as Australian farmers recieve no subsidies or taffific protection under our Free Trade commitments.

In fact the above is a cruel joke. Remember that the US government subsidizes its farmers to the tune of AU$69 billion each year and they are now pumping an additional AU$43 billion into rural communities.

The difference is that while the USA pretends to be the great champion of Free Trade they are not prepared to sacrifice their farmers and rural communities.

Australia on the other hand embraces Free Trade and delights in watching our farmers being forced off the land in droves by cheap imports and over regulation.

Why do we do this? Because we are the clever country. So clever that in fact one day soon we won’t be able to feed ourselves. No farmers = No food.

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Have Your say!

Australian Agriculture minister Tony Burke and Trade Minister Simon Crean have taken great pride in announcing the following Free Trade initiatives this week.

• Thrown open the doors to a flood of cheap imports from the 10 ASEAN nations. this will see hordes of low cost, low regulated produce and fruit replace Australian produce on Supermarket shelves.

• Thrown open the doors to Chicken imports from anywhere in the worlds.

• Thrown open the doors to low cost and low regulation banana imports from the Philippines.

We saw the Coalition do the same with our pork producers some years ago. Today most pork on supermarket shelves is from heavily subsidized producers in the USA and Denmark. The result is that 40% of our pork producers have left the industry in the last 18 months.

How long will it be before we open our doors to low cost beef from South America?

Can’t happen I hear you say. Why not I ask? After all our major beef processor is the Brazilian owned JBS-Swifts. They are also the largest Beef processor in South America.

Each of our agriculture industries is being picked off one by one by the Free Traders. Soon there will only be the beef and lamb industries left untouched.

Ask yourself – how long?

After all that’s what free trade is all about.

Have your say!

What a week it’s been for the rabid supporters of Free Trade. Amazing how all of this has been announced the week that the Director-General of the World Trade Organization (WTO) Pascal Lamy is here in Australia.

• Saturday 28th February – ASEAN Free Trade Agreement Signed – Australia completely Opens its doors to imports from the 10 Asean Countries.

• Tuesday 3rd March – Australia announces that it will accept Chicken imports from anywhere in the world.

• Tuesday 3rd March – India announces it will accept milk product from Australia for the 1st time since 2003. Hope to build trade back up to $6m a year – big deal.

• Thursday 5th March – Australia opens to doors wide to Filipino Banana exports, because as Minister Burke say’s we don’t want to upset the Filipino farmers.

• Thursday 5th March – Pascal Lamy addresses ABARE Outlook conference. Tells Australia & New Zealand to keep the faith and remain strong Free Trade advocates as the rest of the world slides into protectionism.

• Thursday 5th of March – MLA celebrates announcements that Free Trade Talks with South Korea  are ‘to start’ later this year. While in the meantime South Korea (our 3rd largest wheat customer) is going elsewhere to buy their wheat because of the logistics consequences of Deregulating our export wheat market.

• Friday 6th March – India agrees to wheat exports – but not until May. “It matters not that that is after a general election (and of course subject to review) and that their grain storage facilities are overflowing with their own grain. The announcement is a farce.

Oh what a wonderful week for all the Free Trade proponents. They all get a pat on the head from WTO boss Pascal Lamy before he jets off back to France.

And when he is gone what are we left with:

1. Doors wide open to a flood of cheap imports from third world ASEAN countries. Our small crop and fruit growers can expect to be wiped out by cheap produce flooding onto supermarket shelves from our near northern neighbours.

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2. Our Chicken producers now have to compete against every low cost, low regulated and subsidized producing nation on the planet.

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3. Our Banana industry can now be wiped out by a flood of low cost, low regulated banana’s from the Filipinos.

All the while our governments and our Ag lobby groups kid themselves that global free trade even exists. It is a complete delusional myth, a magnificent dream they have.

For our farmers and manufacturers and Australian workers it is a terminal nightmare, and one it appears be are not capable of waking up from.

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Have Your Say!

Incompetent politicians on both sides of the Tasman have bargained away our Agriculture industries in their rush to embrace global free trade.

ABC’s Lateline host Tony Jone’s interview with World Trade Organization Director General Pascal Lamy [pictured below] exposed the outrageous fraud that Free Trade policies have imposed on Australian and New Zealand farmers.

TONY JONES: What are you going to tell Kevin Rudd when you meet him today? What is your message for him? Because it looks like the whole dream of a free trade system is gone.

PASCAL LAMY: I don’t think I agree with that. I think …

TONY JONES: The dream is still there, but the reality?

PASCAL LAMY: No, no, the trade will remain open for a large part because protectionist’s temptation are limited by what we have in the World Trade Organisation, which is a strong frame of disciplines…..

Tony Jones cuts to the chase and blurts out what is obvious to every farmer in Australian and New Zealand. Oh that’s every farmer except the majority of those that sit on the executives of the National Farmers Federation, Meat & Livestock Australia, AgForce, New South Wales Farmers, Victorian Farmers Federation, etc etc etc.

TONY JONES:  I mean, I’d make this point in passing on their behalf and on the behalf of Australians, New Zealanders and others, who are locked out of Europe in the United States:

when it comes to agricultural trade, I mean, it would seem to those countries, speaking from the Australian perspective, that the trade disciplines you’re talking about are mythological, because they leave out this huge area of trade which the developing world you just cited is reliant on.

PASCAL LAMY: They don’t leave it out, thanks to the previous round. But you’re absolutely correct.

They need to be tightened, they need to be strengthened, which is why Australia, New Zealand and a few others have been on the defensive on this, vis-a-vis US, EU and Japan. And, which is one of the precise purposes of these Doha development round which we started seven years ago and which we’re trying to conclude.

If they would agree!!!! Why wasn’t that hammered out when we threw our collective doors open to the brave new world of Free Trade? What, 7 years on and we are still hoping that the US, Europe and Japan might come to the party.

That is at best,  gross incompetence and at worst absolute stupidity on our collective politicians and Ag lobby groups behalf.

Here it is in black and white right from the head of the WTO. Australia and New Zealand Governments have slaughtered our Agriculture industries at the alter of Free Trade.

As Tony Jones says – there is no such thing as Free Trade, it’s a myth.

Governments in the US, EU and Japan will never stop subsidizing their farmers, why?, because they hold their nations food security as their number one priority.

They know if you cannot feed your people, then society itself breaks down. We ( Australia and New Zealand)  really do have the stupidest politicians on earth.

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Have Your say!

Australia’s trade minister Simon Crean is crowing about the new Free trade deal he has just signed Australia up to.

AUSTRALIA will open its markets completely to imports from the 10 ASEAN countries, but will not get full access to their markets under a free trade agreement signed in Thailand last night.

Under a deal Trade Minister Simon Crean said was bigger than the deal with the US, indeed “the largest FTA Australia has ever signed”

Well done Simon. Every Australian & New Zealand farmer and manufacturer can now compete on a level playing field with farmers and manufacturers in Indonesia, Malaysia, Thailand, Singapore, Vietnam, Brunei, Cambodia, Laos, Myanmar, and Vietnam.

Lets see last time I looked all except Singapore are 3rd world nations who pay their workers what AU$2 day. In Australia we pay our workers $200 a day with your government about to increase that by up to 20% with your new industrial relations reforms.

We should have no trouble competing with their food producers or manufacturers.

But hang on – Simon must have won us some advantages with his honed and tough negotiating skills.

Australia already has free trade with Singapore. But the other nine Asian countries will retain some barriers in areas including dairy products, cars, and other machinery to protect producers.

Minister Crean crows:

“Trade barriers are coming down in the region,”

And he is right - ours – get ready to see a flood of cheap food, cars, and retail junk in Australian and New Zealand supermarkets and shopping malls.

“Our challenge to Australian business and exporters is to look to South-East Asia to take advantage of the new opportunities.

This is an extremely strong signal to the rest of the world that the Asian region remains committed to pursuing economic growth, exports and jobs to help drive the economic recovery.”

Oh thats great – so Mr Crean, lets now look to South-East Asia to export all of our jobs, as we saw this week with Pacific Brands (Bonds) sacking 1,850 Australian workers and closing 7 factories to move its operation to China.

Lets look to South-East Asia to import all of our fruit and vegetables while Australian farmers produce rots in the paddock or on the tree because we can’t compete with the flood of cheap imports.

Simon, just tell us what we can produce on a huge scale here that those countries can afford to buy, is it rice (no), is it wheat (no), is it beef (no), is it lamb (no), is it dairy (yes – oh but its no included in the deal) well then maybe it’s Kangaroo?

Unfortunately our farmers can’t move their farm production to South East Asia, because unlike Australia those countries have severe restrictions on foreigners owning land in their countries.

Well done Simon, another stake in the heart of all Australian food producers and manufacturers.

Don’t you love Free Trade. Well these industry groups do:

Business groups hailed the agreement. The Business Council, National Farmers Federation, Minerals Council, Australian Industry Group, and Australian Chamber of Commerce and Industry united in support, although the NFF regretted the exclusions.

Thats right folks – National Farmers Federations supports the deal, with some regrets. They are a pathetic joke.

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Have your say!

Agmates editor Steve Truman writes:

I’m feeling like Winston Churchill must have felt when Neville Chamberlain was British PM and his and the governments policy of the day was to avoid war by appeasing Adolf Hitler.

I keep banging on about the importance of food security whilst our governments and peak farm organizations over the last 3 decades up to the current orchestrate the greatest routing our primary production industries this nation has ever seen.

A new report just released by the UN says:

By 2030 it is estimated that cereal production must increase by 30% and meat production by 80% to meet the demands of a global population of more than eight billion people.

The report The Vital Ingredient: Chemical science & engineering for sustainable food was released at Britain’s House of Commons by Environment, Food and Rural Affairs Secretary Hilary Benn.

Professor Peter Lilford is the chairman of the working group that prepared the report. He said:

The countries that are less technologically advanced and those that rely most heavily on food imports will be the first to suffer. It will be survival of the fittest.

Last year we saw riots in Bangladesh and Morocco because of food shortages.

As I’ve written here, here,  here and here Australia is rapidly heading in exactly that direction. Our Free Trade and environmental policy are crippling our Agriculture industry. We have lost 11,000 family farmers in just the last decade.

We only have 130,000 farmers left feeding a population of 21.5 million and many of those are struggling financially to stay in business. This is what we are doing -

• Tree clearing bans have effectively capped the amount of available arable land,

• carbon sink forests will lock up a further 84 million acres of highly fertile agricultural land over the next four decades,

• the governments environmental water buyback policy will cut agricultural production from the Murray Darling (the nations food bowl) by 50% over the next two decades,

• the emissions trading scheme with force 1,000 of productive food producers who are not in high rainfall areas where they can grow trees for carbon off the land,

• pursuing Free Trade policy is driving our productive farmers off the land.

• The government is slashing funding to Agricultural Research.

Any country that has an abundance of arable agricultural land that winds up not being able to feed itself is indeed the Stupidest nation on earth.

I feel like Winston Churchill (though I don’t delude myself for a nano second that I am even worthy to make such a comparison) warning of something that’s obvious, imminent and a real threat to our nations security, but no one is listening.

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Have Your say!

Chinese food imports into Australia have exploded in the last 3 years.

Mega tonnages of Chinese produce have flooded Australian shores in the past six months, nudging Australian farmers off local supermarket shelves and raising fresh concerns about food safety.

For example – in just the last six months we have imported:

250 tonnes of fresh or chilled garlic, 67t of broccoli, 400kg of flour, more than 38t of preserved tomatoes, 1085t of various types of peanuts and 160,000 litres of apple juice.

Of course this will be no surprise the Federal politicians and rural lobby groups like the National Farmers Federation. This is exactly the result they’d expected from the Free Trade policy that they all fiercely advocate.

Supporting Chinese farmers who pay their workers $8 a day and have very lax food safety regulations whilst our own farmers who can’t compete  go broke.

I’d suggest while our Federal politicians and the peak farm groups are chasing their Free Trade folly they should apply to the UN to have Australian family farmers listed on world endangered species registrar.

Have your say.