TFGA commodity councils unite on FTA

The Australia-China FTA represents a major growth opportunity for Tasmanian farmers, according to the Tasmanian Farmers and Graziers Association’s (TFGA) key commodity councils.

The long-awaited FTA announcement was announced yesterday by Prime Minister Tony Abbott following a meeting with Chinese President Xi Jinping in Canberra. The deal paves the way for the expansion of two-way trade, currently valued at $150 billion, between the two countries, with agriculture a critical component of future trade.

One of the big winners from the deal will be the dairy sector, with the removal of all tariffs on Australian dairy products within 4 to 9 years. China is already Australia’s second-largest market for dairy exports, doubling in size since 2008 to more than $351 million in 2013.

TFGA Dairy Council chairman, Andrew Lester, said that the FTA would finally put Tasmanian farmers on an equal footing with their New Zealand rivals, who have had free trade with China since 2008.

“The Tasmanian dairy industry is already well exposed to the global market, so we are in better position than some. It will take a while before we will see any flow-on effects from the reduction in tariffs, but anything that gives us improved access to the Chinese market has got to be a good thing,” Mr Lester said.

In contrast to the New Zealand agreement, Australia will only face a discretionary safeguard on whole milk powders, with the trigger volume set well above current trade levels. For all other dairy products Australia will receive unlimited preferential access.

Key outcomes for the Tasmania’s meat industry in the FTA include:
Elimination of tariffs on beef imports (currently ranging from 12-25 per cent) within 9 years; and
Elimination of tariffs on sheepmeat (currently ranging from 12 to 23 percent) within 8 years.
Australia is already China’s dominant supplier of beef and the demand for sheepmeat is also growing rapidly. The combined value of reducing tariffs in the two sectors to zero is estimated to be more than $5 billion by 2030.

“The gradual removal of the tariff burden will have an immense impact of the profitability of Tasmanian sheep and cattle producers,” Meat Council Chairman Brian Stewart said.

“It will give us a distinct advantage over other countries who are also vying for attention in the Chinese market.”

TFGA Wool Council chairman Michael Parsons also welcomed the FTA, and said that it would provide a vital boost in an already established market.

Key outcomes for the sector include an exclusive Country Specific Quota of 30,000 tonnes clean wool (approx. 43,000 greasy) that will grow by five per cent each year till 2024.

“China already accounts for 75 per cent of Australia’s raw wool exports and our quota of 287,000 tonnes is only taxed at one percent. The Country Specific Quota is recognition of our current place in the market and the quality product that we have continued to provide and the positive relationship that has been fostered with our Chinese customers,’’ Mr Parsons said.

The FTA will help to ensure a very bright future for the Tasmanian vegetable industry, according to TFGA Vegetable Council Chairman Andrew Craigie.

“While it doesn’t mean a whole lot immediately, the future is looking excellent,” Mr Craigie said.

Key outcomes in the FTA that will benefit Tasmanian fruit and vegetable growers include:
Elimination of the 10-30 per cent tariff fruit (other than citrus) within 4 years;
Elimination of the 10-13 per cent tariff on all vegetable within 4 years.
As part of the agreement, China has also committed to comply with the World Trade Organisation’s (WTO) Sanitary and PhytoSanitary (SPS) agreement in all its laws regulations, requirements and procedures.

“It is these kind of moves that give our vegetable farmers the incentives that they need to pursue trading relationships,” Mr Craigie said.
Tasmanian Farmers and Graziers Association’s (TFGA) key commodity councils.