Exporting and importing food during the COVID-19 lockdown: What has changed?
Exporting and importing food during the COVID-19 lockdown: What has changed?
By John Thisgaard (FoodLegal Senior Associate) and Joe Lederman (FoodLegal Co-Principal)
© Lawmedia Pty Ltd, April 2020
The escalated introduction of various lockdown measures in Australia throughout March 2020 has placed restrictions on Australia’s borders. Many food exporters and importers need to consider the further operational implications of the multiple announcements and new regulations to determine how their business is affected. The purpose of this article is to filter through the noise and present a clearer picture on the permissions and restrictions that apply to Australian food exporters and importers, as at 1 April 2020.
Lockdown measures and the importance of Australia’s global food supply
Due to its abundance of land and varying climates, Australia has a comparative advantage in producing high-quality food. Indeed, 2014 data from the Australian Federal Department of Foreign Affairs and Trade estimates that approximately 65% of the market value of Australian agriculture is exported overseas. Key commodities exported to other markets include beef, wheat, other meat and wine. Australia therefore plays a key role in the global food supply, and many Australian primary producers are reliant on continued demand from overseas.
Australian consumers also have a demand for product offerings from overseas. This can include products that multinationals have as part of their global product offering that are manufactured outside of Australia, as well as smaller innovative products that are making waves overseas that could present a boon for an Australian company that secures local distribution rights.
By January 2020, the world was introduced to the horrifying prospects of a novel virus that presented a significant risk to human health globally if left unchecked. In the following months, numerous countries have adopted lockdown measures including shutting borders to minimise the spread of the virus. Throughout March 2020 Australia followed suit, with Federal and State governments introducing progressively strict measures including restrictions on the movement of people across borders (both outside and within Australia).
Although necessary to protect public health, a few of the early announcements and measures by the Australian government may have caused some confusion primary producers and food businesses who rely on trade in and out of Australia, with some facing considerable hardship if borders were to remain closed for a significant period of time.
Has the government acted to restrict the supply of food?
Despite the emphasis on lockdown controls, the Australian federal government has not actively acted to restrict the movement of food in or out of Australia. Numerous government agencies including Food Standards Australia New Zealand (FSANZ) and the European Food Safety Authority (EFSA) have advised that there is no evidence that COVID-19 can be transmitted through food. Theoretically, food import and export continues to operate in Australia as normal.
However, as individual countries have entered lockdown and become more isolated this has caused:
- Lower demand for certain commodities (for example, the shut-down of hospitality industries in many countries means that there is less demand for Australian exports such as dairy); and
reduction in freight services to many countries including China, as many
providers cut back their services.
Moreover, if other countries move to suspend the export of certain commodities, Australian importers would be effectively prevented from sourcing product from these markets.
As such, even in the absence of direct legal hurdles, many primary producers and food businesses are facing practical obstacles in relation to overseas trade.
How are food exports impacted?
As outlined above, as at April 2020, Australia has not imposed any additional restrictions on the export of food from Australia.
On 1 April 2020 the Australian federal government announced an International Freight Assistance Mechanism (IFAM) designed to assist Australian food exporters in reaching key international markets. The IFAM will provide funding for international air freight routes to China, Japan, Hong Kong, Singapore and the United Arab Emirates, with the potential for other markets to be added.
According to the International Freight Assistance Mechanism Fact Sheet, support will be available for “high-value agricultural and fisheries exports, predominantly for perishable products.” It goes on to provide examples including seafood, premium red meat, dairy and horticulture. Exporters can apply for assistance by contacting the Federal Department of Agriculture, Water and the Environment.
Where importing countries have imposed additional temporary certification or assurance requirements for exporters, the Department of Agriculture has prepared a pro forma letter that exporters can use to demonstrate compliance with Australia’s safety standards. The Department of Agriculture has stated that it will not provide further certification or tailored statements, but will continue to update the Manual of Importing Country Requirements (MICoR). Foods most likely to be affected are dairy, eggs, and fish.
All exported products must continue to meet relevant requirements in the Export Control Act and any applicable Export Control Order.
Other export issues
Outside of the food industry, the government has introduced temporary measures to prohibit the export of certain goods. The Customs (Prohibited Exports) Amendment (COVID‑19 Human Biosecurity Emergency) Regulations 2020 was introduced on 29 March 2020 and prohibits the commercial export of the following products:
- disposable face masks
- disposable gloves
- disposable gowns
- goggles, glasses or eye visors
- alcohol wipes
How are food imports impacted?
As stated above, as at April 2020, Australia has not imposed any additional restrictions on food imports to Australia. Imported food must continue to comply with the Imported Food Control Act and any relevant Imported Food Control Order. Biosecurity officials must still have access to any third party sites that are required to be audited under an Approved Arrangement scheme. If the biosecurity official is unable to access the site, then the scheme cannot be approved.
As is the case with exports, the global reduction in international freight nevertheless means that it may be more difficult to arrange the transport of goods into Australia. The Department of Agriculture stated on 27 March 2020 that it is continuing to carry out on-site inspections and audits to facilitate the flow of imported goods, but that it may impose alternative procedures on a case-by-case basis.
Moreover, other countries have imposed restrictions on the export of certain commodities, which might pose a difficulty for Australian companies looking to import these commodities to use as inputs in their own products. For instance, Russia is considering restrictions on the export of wheat, while Vietnam has suspended new export licences in relation to rice exports.
Is the situation likely to change?
The information in this article is accurate as at 1 April 2020. COVID-19 presents a global issue that continues to evolve, and it is possible that countries including Australia could likely change the levels of restrictions on the movement of goods across borders. However, the Australian government and Department of Agriculture have recognised the importance of accessing international markets to many Australian food producers. We recommend you consult FoodLegal in relation to these issues.
This is general information rather than legal advice and is current as of 7 Apr 2020. We therefore recommend you seek legal advice for your particular circumstances if you want to rely on advice or information to be a basis for any commercial decision-making by you or your business.