Australia and Indonesia have concluded the negotiations on their trade agreement
Australian and Indonesian Governments' negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) have concluded and that could be a game changer for the livestock and red meat industry in Australia.
Chair of the industry’s IA-CEPA taskforce David Foote said that Indonesia is a vitally important customer for significant quantities of Australian live cattle, beef and offal and has a steady requirement for sheepmeat, albeit smaller volumes.
"IA-CEPA will not only deliver additional trade liberalisation by building on the ASEAN-Australia-New Zealand FTA (AANZFTA) outcomes, it will also provide a framework for a more market-orientated import regime. This, in turn, will deliver benefits for both our sector as well as the Indonesian supply chain – including importers, retailers and foodservice operators. In an increasingly competitive market, whereby Indonesia is granting access to numerous beef suppliers, a removal of these import tariffs will assist in maintaining the Australian product’s cost competitiveness. Indonesia has an ongoing requirement for imported red meat (specifically beef) and, whether via the supply of live cattle or boxed product, our industry is ideally placed to assist Indonesia with meeting this demand", Mr Foote said.
IA-CEPA will deliver:
1) A quota (with a 0% in-quota tariff) for 575,000 head of live (male) cattle, which will grow by 4% per annum over five years to 700,000 head. Import permits will be issued automatically on an annual basis and without seasonal restrictions - a welcome improvement on previous administrative procedures. A review of this trade will be conducted after five years to consider future increases in the quota (i.e. above 700,000 head).
2) Liberalised access for female live cattle exported to Indonesia, with 0% tariff on entry into force (EIF) of the agreement and no quota or import permit restrictions.
3) Immediate or gradual liberalisation of tariffs applicable to boxed beef and sheepmeat exports to Indonesia – whereby those tariff lines not already benefiting from 0% tariffs secured under AANZFTA, will benefit from either a 0% or 2.5% tariff on EIF (down from 5%) with the tariffs being eliminated altogether over five years.
4) Similar advantages will be extended to frozen offals - with the 5% tariff eliminated on EIF of the agreement.
Note: no quota or import permit restrictions apply to any boxed red meat or offal exports.
In the first 7 months of 2018, Australia's livestock and red meat exports to Indonesia have consisted in 290,150 live cattle, 36,812 tonnes of beef, 746 tonnes of lamb, 459 tonnes of mutton, and 16,936 tonnes of offal.
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