Restrictions on exporting your product from Australia

A business can export almost anything out of Australia. Products that are not allowed to be exported, or need an export permit or have restrictions placed on their export include: certain primary products, dangerous goods, military equipment, aboriginal artefacts, hazardous waste, cultural products, chemicals, animals, primary products, drugs, plants, gemstones, and metals.  So before exporting you should check with Australian Customs.

The Australian Export Control Act of 1982, divides products into ‘prescribed’ and ‘non-prescribed’ goods. Depending on what you want to export, the requirements you must meet will vary. Examples of prescribed goods are: dairy, live animals, fish, plants, plant products, eggs, meat and meat products, grain, animal food (frozen raw meat), organic produce, fresh fruit and vegetables, dried fruit, pharmaceuticals (raw animal material) . Non-prescribed goods are all other goods.

Some prescribed goods intended for export must be prepared at registered premises. This means that your premises must be constructed, equipped and operate in an effective and hygienic manner, and be approved by the Australian Quarantine and Inspection Service (AQIS). You can begin export operations when you receive notification of approval by AQIS and (where required) overseas government authorities. Check AQIS for more information.

Restrictions on the import of your product overseas

Every country can have either absolute prohibition, (which means that you are not allowed to export the goods to them under any circumstances,) or a restriction, where you need to have written permission, usually in the form of a permit, in order to have your goods allowed in their country.

The import can be restricted because of Sanctions. Trade sanctions are trade penalties imposed by a country (or group of countries) on another country (or group of countries). Typically the sanctions take the form of import tariffs (duties), licensing schemes or a permit. They tend to be imposed because of unresolved trade or policy dispute. For example, one country may find that another is unfairly subsidising exports of one or more products, or unfairly protecting some industry sectors from competition. The first country may retaliate by imposing import duties, or some other sanction, on goods or services from the second country. Check the import tarriff in the country of import; your freight forwarder or the importer should be able to help you.

Economic sanctions are not always imposed because of economic circumstances. Sometimes they are political. For example, the United States has imposed economic sanctions against Iran for years, on the basis that the Iranian government sponsors groups who work against US interests. The United Nations imposed stringent economic sanctions on Iraq after the first Gulf War, as an attempt to make the Iraqi government co-operate with the UN weapons inspectors’ monitoring of Iraq’s weapons and weapons programs. These sanctions were unusually strict in that very little in the way of trade goods were allowed into or out of Iraq during the sanction period. If you think your chosen destination country might be subject to a sanction, check with the Department of Foreign Affairs and Trade.

A spokesman for Primary Industries Minister Bryan Green said he could not confirm the FOQA allegations until a budget decision was made, although the Tasmanian Government has previously said it would not rule out cuts to quarantine services.

Deputy Opposition Leader Jeremy Rockliff said if the allegations were true, they would cause significant damage to the export agriculture-reliant economy. “A cut of this magnitude would fly in the face of any food bowl initiative,” he said, in reference to the government’s bid to turn the southern state into the nation’s food bowl.

Rockliff has previously said cuts would tell trading partners the government doesn’t take biosecurity seriously. “It sends a weaker message to them which puts our export markets in jeopardy.”

The warning follows the discovery of two fruit flies in North Tasmania in February, which caused China to ban imports of Tasmanian apples until the end of this month. Greens spokeswoman Cassy O’Connor said the fruit fly finds represent a significant threat, both to the Tasmanian agricultural sector and Australia’s regional economies. “I know the government makes a significant investment in biosecurity but what we need to do is make sure that money is being targeted in the right places.”

The 27-page policy document outlines five main principles to reform Australian trade. The first is that foreign policy considerations should not override trade ones, meaning political issues will take a back seat. “History has taught us that the entanglement of trade policy and foreign policy can have tragic consequences,” the document says.

Labor will also cease to focus on negotiating individual trade deals for political reasons. The document says such “low-quality’ deals “lock in and legitimise” protectionism. Instead, the foundation of trade policy will be the pursuit of comprehensive multilateral free trade agreements. “The government is willing to conclude a trade agreement with any country willing to sign up to a high-quality and comprehensive bilateral or regional trade deal that is consistent with global trading rules.”

Thirdly, itcommits the government to transparency in free trade negotiations and non-discrimination among countries when negotiating trade deals. Effectively, that means Australia will stop seeking bilateral deals that exclude other trading partners from commensurate benefits. “The Gillard government is not interested in collecting trophies for the national mantelpiece—empty vessels engraved with the words ‘free trade agreement’ that formalise and validate existing trade restrictions.”

Former Liberal Prime Minister John Howard favoured bilateral trade deals. The new approach will allow existing bilateral trade negotiations to continue, but not where an agreement would undermine future or existing multilateral trade agreements. Australia is currently engaged in bilateral trade negotiations with Korea, Japan, China, Malaysia, Indonesia and the Gulf Cooperation Council. Gillard hopes to launch negotiations for a bilateral trade free trade agreement between India and Australia later this year.

Fourthly, the document says Australia will pursue trade reform without waiting for trading partners to reform their own trade policies, including labour and environmental standards. Finally, it says trade policy should be executed seamlessly in line with wider economic reform.

The document also raised objections to the way Australia uses its quarantine system, foreshadowing reform in this area. “Quarantine restrictions are legitimate in reducing the risk of imported pests and diseases but should not be used as a surreptitious measure to protect domestic primary industries against competition from imports.” Australia’s long-standing ban on the import of New Zealand apples (lifted earlier this year) was raised as an example of quarantine concerns disguising a protectionist agenda.

The paper criticised the movement of labour, management and equipment resources to mining territories, warning it left non-mining areas unable to “take up the slack” when the mining boom slowed down. But the document also said the government did not believe the movement of production resources should be impeded by interventionist government policy. “That’s why an economic reform program designed to restart productivity growth as the basis for securing the competitiveness of Australian industries—mining and non-mining—is essential.”

The policy takes on nearly all of the recommendations made by the Productivity Commission’s 2010 report on trade agreements.

For its timely action in averting the threat presented by beetles aboard the Tatiana Schulte, Maersk Line Australia received the Regional Award for Services to Biosecurity from the Australian Quarantine and Inspection Service on 16 November.

The Tatiana Schulte arrived in Australian waters on 5 February 2010, where the ship’s captain discovered and photographed the beetles in the cargo before notifying Maersk’s port agent Inchcape, who passed the information to AQIS.

AQIS identified the beetle, which will fly from ships towards lights on shore, and denied the Tatiana Schulte entry. Maersk coordinated a return to New Zealand to carry out AQIS requirements before the ship returned to Australia to clear quarantine and unload its cargo only 10 days later than scheduled.

‘The incident, although costly and unfortunate, was managed very well,” Maersk’s operations manager Andrew Cumming said, “but the real hero is the ship’s master who recognised the potential risk posed by the insects and brought it to the attention of the authorities.”

Maersk is now in the running for the national award which will be presented by the Federal Minister for Agriculture and Fishers at Parliament House in Canberra on 22 November.

The new agreement lifts China’s previous requirement to carry out surveys for European canker and fire blight, two diseases of quarantine concern to China that are not present in Tasmania or the rest of Australia. The changes also indicate China’s recognition of Tasmania’s success in identifying and managing pests that can affect the health and transportation of the apples.

The amended protocol was a boost for Australia’s apple industry, and Australia’s trade relationship with China, according to the Minister for Agriculture Tony Burke.

“These new quarantine conditions are a tremendous boost for our important horticultural industry and I commend the Australian and Chinese authorities for reviewing the agreement which now allows Tasmanian growers to access the Chinese market under workable protocol requirements,” he said.

“Strong exports are critical for the future of Australia (and) improved access for Tasmanian apples is great news for the industry, and opens up various niche markets throughout China.”

The agreement signifies another step in expanding and growing Australia’s large horticultural industry, asserted Burke. “The total value of Australian horticulture exports consisting of fresh and processed fruit, nuts and vegetables was $1.29 billion in 2008/09.”

Australia’s next horticultural sector access priority to China is summer fruits, grapes, cherries and apples from mainland Australia.

Japan is fearful of the accidental importation of fruit flies carried in Australian grapefruits, traditionally restricting Australia’s grapefruit exports to include only those sourced from fruit fly pest free areas.

However, recent fruit fly research has allowed Australian researchers to give Japan the necessary assurance that the risk of fruit flies will be adequately managed through cold disinfestation treatment and appropriate biosecurity measures.

The decision is good news for citrus producers across the nation, says Minister for Agriculture, Fisheries and Forestry Tony Burke: “The decision by the Japanese Ministry of Agriculture, Forestry and Fisheries allows new access for producers from all over Australia to export to the lucrative Japanese market. The result is important for producers of the sweeter red-fleshed grapefruit varieties from Australia’s north who have placed considerable investment in developing a product for the Japanese market.”

Burke’s statements are seconded by Citrus Australia Ltd chief executive Judith Damiani who says that Australian citrus producers can look forward to expansion as a result of the many new market opportunities.

“Export orders are already being placed for the new season commencing March 2011. The first year of trade under the new conditions will see an estimated 1,500 tons of grapefruit exported to Japan valued at approximately $1.5 million,” Damiani says.

“The longer-term outlook looks even more promising. The demand in Japan over the next five years is anticipated to be around 4,000 tons and valued at $4.8 million annually.”

Australia’s next horticultural market access priority to Japan is table grapes.

The broader Australian economy depends on a strict biosecurity system, the Minister for Agriculture, Fisheries and Forestry, Tony Burke, said: “Our biosecurity system helps to underpin regional economies and jobs, and supports valuable export markets including in agriculture, seafood and timber.”

Burke pointed to the 2007 equine influenza outbreak as evidence of the need to maintain a strong biosecurity regime. “The outbreak cost industry an estimated $1 billion, which shows the devastating impact of exotic disease outbreaks.”

The sizeable investment will ensure that Australia remains a world leader in export certification systems, with particular impact expected on the red meat, dairy, grain, fish, horticulture and live export industry sectors. The maintenance and reforms will be delivered gradually over the next two years.

Australia has some of the strictest quarantine laws in the world, which combined with its relative isolation help to protect Australia from pests and diseases that plague Europe and the Americas.

Horticulture Australia Council CEO Kris Newton says although 180 horticulture commodities are exported, the sector is still a relatively small export market by Australian standards.

Maxwell Summers, CEO of the Australian Horticultural Exporters Association, says the industry exports to all major global markets but primarily Asia, which takes 65 percent of our horticultural exports. This is based on a long-standing relationship and proximity to our northern neighbours.

With world population growth continuing to escalate, there’s a growing demand for food but it doesn’t automatically equate to a growing demand for our horticulture products.

There are many hurdles for those in this diverse industry, and making inroads into international markets can be time consuming, costly and complicated.

New exporters

Tim Reid, chair of the newly formed Office of Horticulture Market Access, says simply having a product is not enough to qualify you for entry into the ranks of exporter. “Horticulture market access to a foreign country has to be negotiated on a national government to national government basis,” he says. “Our organisations cannot just go overseas and negotiate with international governments for market access to be granted for our products. We have to work through the Australian government and mainly through Biosecurity Australia.”

And even then it’s not easy. The red tape and negotiation can take years or even decades.

But Reid says there are fundamental criteria and risk assessments that potential exporters need to consider. Is there an international market for your product? Are you able to supply it? Do you have the ability to increase production to meet an increase in demand? Do you have quarantine issues? Are you in a fruit fly free zone?

Horticultural exports are often developed on a regional basis, rather than looking at individual cases, so it is a good idea to know what local producers are doing.

Summers says it is a difficult time for those wanting to get into the export side of the industry. “All of the markets are still in recession, prices are still depressed,” he explains.

However, if you are particularly keen to give it a try he recommends finding high quality products and advises you find importers you can do business with, as it is essential to have a partner you can trust.

Existing exporters

While government negotiations are crucial to the industry’s exporting success, Reid recommends developing commercial relationships to help support this. Negotiating on an industry-to-industry level can mean you have someone “pulling for you on the other end”. They can then help lobby their governments to give your products priority and hopefully speed up the process.

While fruit, vegetables and plants are the most prominent aspect of horticultural exports there are an increasing number of plant breeders who are successfully exporting their intellectual property.

Doug Waterhouse, chief of Plant Breeders Rights at IP Australia cites the example of the Western Australian grower who bred the Pink Lady apple. The breeder registered the apple under the Plant Breeders Rights in countries around the world, so any growers who want to grow the variety need to buy a license. “Pink Lady is, or is about to become, the most popular apple in the world,” Waterhouse says. “Every market that you see overseas has Pink Lady in it.”

Waterhouse believes there are a growing number of opportunities to sell intellectual property in markets around the world, but particularly in developing nations where they are still using varieties dating back decades instead of more cost effective modern varieties.

Mark Lunghusen, managing director of Outback Plants and World Select Plants, says it is essential to know your market and be known in your market. Regularly visiting your business partners and the regions you want to sell into is essential to continued success and developing new international markets. It’s about building and maintaining relationships and ensuring you have a regular presence in the market, he says. If you become complacent, someone will quickly take advantage of you.

Being unique is also an advantage, according to Summers. “You need to promote some kind of brand that your importers and other importers will recognise.”

Reliability, credibility and after sales support will go a long way to developing your reputation and help cement relationships.

The premium mangoes had already received vapour heat treatment and were ready for shipping when Australian Quarantine and Inspection Service (AQIS) inspectors made the discovery. Inspectors are waiting for the larvae to hatch, which could push the ban to 20 days.

“While we are well through the season it is an important market and in the short-term there’s no fruit going through, so we hope we can resolve this as soon as possible,” said Australian Mango Industry Association development manager Trevor Dunmall.

Dunmall expressed disappointment that the ban extended to all Australian mangoes, not just from the facility in question as the Japanese market for Australian mangoes accounted for about $3 million a year.

Earlier this year, the Federal Government cancelled a 40 percent subsidy on export inspection costs as part of several fundamental changes to Australia’s quarantine service. The reforms failed to pass the Senate, however, and the previous subsidy that was in place has been reinstated until 2011.

Many growers are concerned about the government’s recent announcement that the subsidy will not be paid retrospectively, as they have been paying the higher fees since July 1, potentially putting many citrus and some vegetable growers at disadvantage.

Kris Newton, chief executive office of the Horticulture Australia Council, says the fees need to be repaid to the growers affected by the regulatory changes.