September 6, 2018

 

New Australia-Indonesia trade deal augurs well for Aussie cattlemen

 

 

Australia and Indonesia have announced the conclusion of the negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which was welcomed by the Australian livestock and red meat industry.

 

Indonesia is an important market for the industry in that it purchases significant quantities of Australian live cattle, beef and offal.

 

"IA-CEPA is a most welcome addition to the suite of FTAs [free trade agreements] the Australian Government has concluded to date with key trading partners", said David Foote, chair of the industry's IA-CEPA taskforce.

 

According to Meat & Livestock Australia, IA-CEPA will deliver:

 

-- 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).

 

-- 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.

 

-- Immediate or gradual liberalisation of tariffs applicable to boxed beef and sheep meat 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.

 

-- Similar advantages will be extended to frozen offals - with the 5% tariff eliminated on EIF of the agreement.

 

"In an increasingly competitive market, whereby Indonesia is granting access to numerous beef suppliers, a removal of these import tariffs will assist in maintaining Australian product's cost competitiveness," Foote said.

 

Last year, Australia exported a total of 512,871 tonnes of live cattle and in the first seven months of this year, live cattle exports totalled 290,150 tonnes, according to Meat & Livestock Australia.

 

In terms of head count, Australia's cattle exports to Indonesia last year numbered 511,878, which accounted for 58% of all exported cattle, according to figures from the Australian Livestock Export Corp. Ltd.