New free trade arrangements come into effect
The Weekly Times (25/12/2018) - TARIFF reductions and significant new market access arrangements for a large number of agricultural exports will come into force in the next week as new free trade arrangements take effect.
The first round of tariff cuts from the revived Trans Pacific Partnership agreement (TPP-11) will begin on December 30, and over coming years will eventually eliminate 98 per cent of tariffs on exports throughout the Pacific region.
Pork, beef and dairy exporters are among some of the biggest winners, although there will be reductions in tariffs in nearly all major commodities over the next five to 15 years.
Trade Minister Simon Birmingham says TPP-11 market access outcomes build on existing levels of market access Australia has with its FTA partners, namely Japan, Chile, New Zealand, Malaysia, Singapore, Peru, Brunei and Vietnam.
Senator Birmingham said the TPP-11 would provide new access to Canada for Australian grains, sugar and beef exporters, and would open up the growing Mexican market for pork, wheat, sugar, barley and horticulture producers.
It would also improve market access into Japan for beef, wheat, barley and dairy exporters.
In 2017 Australia exported about $12 billion worth of agricultural goods to TPP-11 countries, representing close to 23 per cent of Australia’s total agricultural exports.
In the case of pork, 71 per cent of all exports go to TPP countries.
Under the agreement Japanese and Malaysian pork tariffs will be eliminated over 10-15 years.
Australian dairy exports to TPP-11 countries are now worth $974 million, with the deal enabling significant market access in Japan, in particular, including the elimination or reduction of tariffs and new quotas on some cheeses and other dairy products.
About 33 per cent of Australia’s beef exports go to TPP-11 countries, with Japan’s beef tariffs to be reduced by 9 per cent over 15 years and Canadian beef tariffs (currently 26.5 per cent) eliminated within five years from the end of this month.
Tariffs on sheepmeat exports would be eliminated completely in most countries from December 30. Mexico will phase out tariffs over eight years.
New textile rules of origin should encourage greater demand for Australian wool under the agreement, which would also eliminate all remaining tariffs on Australian raw wool from December 30.
For the first time since 1995, new quota access for Australian rice into Japan will begin, along with a reduction in tariffs on rice products.
Wine, horticulture and seafood exporters can all look forward to improved market access.
In addition to the TPP reductions, a fifth round of tariff cuts under the China-Australia Free Trade Agreement are due on January 1 which will eliminate more than 5000 tariffs.
A sixth round of tariff cuts through the Korea-Australia Free Trade Agreement will also commence on January 1.
Highlights from those two deals include the elimination of tariffs on bottled wine and cherries under ChAFTA from January 1 and a tariff reduction on fresh, chilled and frozen lamb which will fall from 11.2 per cent to 9 per cent on January 1 under the Korean deal.