8 December 2014
Queensland Country Life
THE Australian red meat industry today welcomed news that the Korea-Australia free trade agreement (KAFTA) will come into force on December 12, 2014.
This follows the recent ratification of the KAFTA Implementation Bills by the Australian Parliament and completion of a similar bill approval process by the National Assembly of Korea.
“The Australian red meat industry is very supportive of the KAFTA,” spokesman for the KAFTA Australian red meat industry taskforce Stephen Kelly said.
“Not only is it seen as a mechanism for further improving the trading environment, but it is also a means to address the competitive disadvantage Australian beef faces vs beef imported by Korea from the United States (US) – Australia’s major competitor in the Korean market.”
US beef has been benefiting from tariff cuts following its 2012 free trade agreement (FTA) with Korea, with the previous 40 per cent tariff on beef being eliminated over 15 years to 2026, and US beef facing a 32pc tariff (i.e. an 8pc tariff preference) from January 1, 2014.
According to Mr Kelly, the start of the KAFTA and the consequent first tariff cut for Australian beef will reduce the 8pc margin to a more commercially viable 5.3pc and ensure that the tariff differential is no greater than 5.4pc for the duration of the phased elimination period,” Mr Kelly said.
“The financial impact on the Australian beef industry of achieving entry into force in 2014, and thus benefiting from two successive tariff cuts within a short time frame (with the second cut due on January 1, 2015), will be positive to the tune of around $20 million to $40 million per annum.”
Australian sheepmeat, which currently faces a 22.5pc tariff, will also be a beneficiary via two successive tariff cuts, as will Australian offal (18-27pc tariffs) and further processed meat products (2-72pc tariffs).
Mr Kelly thanked the Minister for Trade and Investment, DFAT officials in Canberra and the Australian Embassy in Seoul for their combined efforts in achieving the KAFTA.
“KAFTA will help Australian exports compete on a more level playing field as well as help secure the ongoing supply of Australian beef for Korean consumers in what is becoming a highly competitive global protein market,” Mr Kelly said.
Courtesy of Queensland Country Life
8 December 2014