MEDIA RELEASE Red meat industry welcomes ChAFTA entry into force
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MEDIA RELEASE Red meat industry welcomes ChAFTA entry into force

Posted by | December 11, 2015 |

The Australian red meat and livestock industry has welcomed the news that the China-Australia Free Trade Agreement (ChAFTA) will enter into force (EIF) on 20 December 2015.


EIF of ChAFTA will see the first tariff cuts delivered across all red meat and livestock tariff lines – with the second tariff cuts due on 1 January 2016 (see table below).


“The quick succession of initial tariff cuts will greatly improve the competitiveness of Australian product – particularly as sheepmeat products from New Zealand will be duty free from 1 January 2016, and other beef suppliers have recently secured improved access,” Chairman of the Australian Red Meat ChAFTA Taskforce David Larkin said.


The current tariffs imposed on Australian beef, sheepmeat and co-products exported to China represent an annual tax on the supply chain in excess of $800 million.  The gradual removal of this cost burden will positively impact the profitability of Australian cattle and sheep producers, processors and exporters, as well as alleviate the inflated prices paid for Australian red meat and associated products by Chinese customers and consumers.


Once fully implemented ChAFTA has the potential to boost the gross value of beef production by $270 million annually by 2024.  Out to 2030, the total benefits for beef will approach $3.3 billion.  For the sheepmeat sector, the potential benefits are more than $150 million each year by 2024 – with the value over the next 16 years being in excess of $1.8 billion.


As China is also a destination for nearly 90% of Australia’s sheepskin exports and 80% of cattle hides, elimination of these tariffs, as well as those on offal, will add $436 million a year by 2024 across both beef and sheepmeat – and out to 2030, these benefits could total $6 billion.


Mr Larkin thanked the Minister for Trade and Investment, DFAT officials in Canberra and the Australian Embassy in Beijing for their combined efforts in achieving entry into force of the ChAFTA prior to the end of 2015.


“The benefits flowing from ChAFTA will add significant value to the Australian red meat and livestock industry and complement the gains derived from the other FTAs Australia has concluded to date,” Mr Larkin said.


Indicative ChAFTA tariff reductions


  Current tariff (%) 21 Dec 2015 1 Jan 2016 1 Jan 2017 1 Jan 2018 1 Jan 2019 1 Jan 2020 1 Jan 2021 1 Jan 2022 1 Jan 2023 1 Jan 2024
Live animals 10 8 6 4 2 0
Beef 12 10.8 9.6 8.4 7.2 6 4.8 3.6 2.4 1.2 0
Sheepmeat 15 13.3 11.7 10 8.3 6.7 5 3.3 1.7 0
Offal 12 10.5 9 7.5 6 4.5 3 1.5 0



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