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Sheepmeat Council : Sheepmeat 2015 2016
26 SHEEPMEAT COUNCIL OF AUSTRALIA ANNUAL MUSTER 2015-16 MARKETING, MARKET ACCESS & TRADE Trade, Market Access and Marketing The Market Access Program (MAP) is jointly funded by producer levies through MLA and processor contributions, via the Australian Meat Processor Corporation. The MAP is underpinned by a strong working relationship between SCA, other peak red meat industry policy councils, M LA, and the Commonwealth Government. During 2015 the MAP invested in supporting industry and government to maintain and liberalise export market access. This expenditure incorporated high level Australia-based trade reform advocacy as well as intelligence gathering, trade liberalisation positioning and alliance building in key overseas markets. The priority focus was to capitalise on the potential sheepmeat industry benefits on offer from concluding and implementing free trade agreements (FTAs) with significant trading partners as well as positioning sheepmeat for future trade reform. China-Australia FTA (ChAFTA) The conclusion of the ChAFTA negotiations in November 2014 delivered on SCA’s priority of eliminating all import tariffs imposed on our products. The potential benefits for sheepmeat have been estimated at more than $150 million each year by 2024 – with the value over the next 16 years being in excess of $1.8 billion. ChAFTA could result in sheepmeat prices paid to producers increasing by 13-26c/kg (dressed weight). ChAFTA encountered a prolonged domestic approval process – hampered by strong opposition from various entities. This necessitated a counter approach by SCA – involving numerous submissions as well as considerable proactive media commentary highlighting the benefits ChAFTA would deliver. SCA representatives have also visited China (see information box) Entry into force of ChAFTA was finally secured on 20 December 2015 resulting in the first tariff cuts across all sheepmeat and live sheep tariff lines – with the second tariff cuts effective on 1 January 2016 (see table below). The quick succession of initial tariff cuts will help to improve the competitiveness of Australian sheepmeat in China, particularly as like products from New Zealand (Australia’s key competitor in China) will be duty free from 1 January 2016. Trans-Pacific Partnership (TPP) Agreement The TPP negotiations concluded on 5 October 2015. TPP members include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. For sheepmeat the following outcomes were secured: • Canada: 2.5% tariff on Australian sheepmeat will be eliminated on entry into force (EIF). • Mexico: 10% sheepmeat tariff eliminated within 8 years; 20% tariffs on sheepmeat offals eliminated on EIF; 10% tariff on live sheep eliminated on E IF. • Peru: 9% sheepmeat tariff eliminated on EIF. • Other TPP members: for the remaining TPP members, existing bilateral agreements (FTAs or the ASEAN- Australia-New Zealand FTA) have already delivered tariff elimination on sheepmeat products. The key now will be securing ratification of the TPP agreement so these benefits can start to flow. In so doing, SCA will be contributing to the Australian domestic approval process via joint submissions to the Joint Standing Committee on Treaties, along with other supportive efforts. Australia-India Comprehensive Economic Cooperation Agreement (AI-CECA) negotiations AI-CECA negotiations commenced in May 2011 and discussions are ongoing. India applies a 30% tariff on Australian sheepmeat and there are also onerous sanitary requirements. As India offers significant export potential for sheepmeat if these trade barriers are addressed, SCA has been strongly encouraging the Minister for Trade and Australia’s trade negotiators, to continue to seek a trade liberalising sheepmeat outcome. Regional Economic Comprehensive Partnership (RCEP) RCEP negotiations commenced in November 2012 involving Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Vietnam and the six states with which these ASEAN members have existing FTAs including Australia, China, India, Japan, South Korea and New Zealand. Given Australia has FTAs with all RCEP members except India, RCEP’s added value will be in its potential incorporation of a framework to address non-tariff barriers – including those which impinge on sheepmeat trade flows. The discussions will continue through 2016, with Australia to host a negotiating round in April. Australia-European Union Free Trade Agreement During 2015, SCA effort was also directed Indicative ChAFTA tariff Current 21 Dec 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan 1 Jan reductions Tariff (%) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Live sheep 10 8 6 4 2 0 - - - - Chilled/frozen sheepmeat 15 13.3 11.7 10 8.3 6.7 5 3.3 1.7 0