The FIA Secretariat recently had the opportunity to speak to James McVitty, Vice President of Government and Industry Relations for Fonterra Co-Operative Group Limited. During the conversation, Mr. McVitty shared his views on the importance of free trade in Asia.

FIA: Why is free trade important in Asia?
McVitty:
Free trade has a critical role to play in addressing food security concerns in Asia, and around the world.

It is clear that food security is one of Asia’s biggest challenges. Two out of every three people going hungry in the world are in Asia. The UN Food and Agriculture Organisation (FAO) predicts there will be an additional 2.3 billion people by 2050 in the world, requiring a 70 per cent rise in agricultural production to meet the consequent rise in demand for high quality, nutritious food.

The Organisation for Economic Co-operation and Development (OECD) believes that this demand can be met through increased agricultural investment, advances in technology to increase productivity and policy measures to ensure that food reaches those who need it with minimal wastage.

Free trade in the food sector can help to improve price signals to farmers, promote investment and support sustainable supply of food. Trade is essential to move food to where it is needed most and take advantage of each country’s comparative advantage in the sustainable use of limited agricultural resources. Ultimately this results in increased choice of nutritious foods for consumers.

FIA: What are some key developments in the implementation of free trade agreements in Asia?
McVitty:
There have been some major developments in free trade agreements in Asia over the last decade. Regional players are not only looking to develop their economies through growing trade linkages with their neighbours, but are reaching out beyond the Asian region to negotiate trade agreements with other countries using bilateral and multilateral dialogue.

Some of the more significant developments in free trade across the region include the ASEAN FTA, the Australia-New Zealand-ASEAN FTA and the Trans-Pacific Partnership (TPP) negotiations. All have a key role to play in reducing import tariffs and harmonising regulations to further open the door to increased trade across the region.

More recently, sixteen countries across Asia– all ten ASEAN members plus China, India, Japan, Korea, Australia and New Zealand – have agreed to start negotiating on a regional comprehensive economic partnership. These negotiations have the potential to boost trade and push Asia forward as a leader in global economic growth.

FIA: What are the benefits of having free trade in the food sector?
McVitty:
Free trade in the food sector is one of the best ways to ensure consumers can gain affordable access to a full range of nutritious foods.

Trade has an important role to play in complementing domestic supply and meet growing demand for food. Policies which support market development and trade encourages investment into the food industry, creates jobs, drives innovation and increasingly secure supply chains. This goes a long way to help feed the world’s fastest-growing population.

FIA: What are some of the obstacles to free trade in Asia?
McVitty:
With constantly evolving market conditions and a number of complex challenges, today’s policies will not necessarily work tomorrow. This is why it is important for government and industry to have regular dialogue in order to share information about key market developments and challenges – open markets and transparent rules are necessary to enable long term commercial relationships and help ensure security of supply.