June 28, 2004

 

 

Australian Minister Rejects Changes To System For Beef Exports To US

 

Australia's Agriculture Minister Warren Truss has rejected an industry request to abandon controls on beef exports to the U.S.

 

"Company-specific quota allocations would remain in place for the United States beef market for the remainder of 2004," Truss said in a statement Monday.

 

Beef industry representative groups last week urged the government to drop the quota controls because they believe exporters will not fill an annual tariff- free quota of 378,214 metric tons to the U.S.

 

Drought and strong export demand in Japan have reduced supply to the U.S. market in 2004, Truss said.

 

The quota allocation system for exporters to the U.S. was introduced by the government in 2002 to fairly distribute to exporters access to the quota.

 

Truss said it was important to provide the trade with certainty and that individual exporters must be able to operate with a high level of confidence that quota entitlements issued each year will not be changed unilaterally, and any investments in these export rights are protected.

 

Truss said there was significant trading in quotas this year as exporters moved to acquire additional quotas or disposed of quotas they believed their company could not use.

 

"This suggests a healthy and flexible trading environment in which quota can be obtained by those who want to export more to the important U.S. market," he said. "There is no evidence that current company allocations are restricting overall quota fill into the U.S. market."

 

Australia is a major global beef exporter with about 80% of total exports destined for the two major markets of Japan and the U.S.

 

In the first five months of this year, Australia exported 121,724 tons of beef to the U.S., not even one-third of the full-year quota.

 

The industry argued that the allocation system is important for orderly shipping in years of excess supply. But in years where this is not likely, the quota is superfluous, and exporters should be free to ship what beef they can, it said.