China increases tariff-free wool quota under FTA

Sheep Central, January 11, 2021

CHINA has increased its 2021 tariff-free quota for Australian clean wool imports in line with its commitment under the China-Australia Free Trade Agreement.

China increased its quota for the import of Australian wool from 36,465 clean tonnes to 38,288 tonnes for 2021; however, this is only a small part of the Australian wool imported by China each year.

Australia exported $1.9 billion worth of greasy wool (197,911 tonnes) and other animal hair 373 tonnes) to China in 2019-20.

The scheduled increase has been welcomed by industry figures as China-Australia trade tensions continue to impact other products, including barley, beef, lamb, wine and timber.

The increase is for greasy wool imported under the FTA between Australia and China (ChAFTA), but calculated on a clean basis, and is referred to as a Country Specific Quota (CSQ).

The quota was initially set at 30,075 tonnes and increases at a compound rate of 5 percent per annum — the figure of 38,288 tonnes represents five years of 5pc increases — and this 5pc scheduled increase is to continue to 2024 to a total of 44,324 tonnes.

This CSQ is imported tariff-free; and is in addition to wool imported under the 287,000 clean tonnes global Tariff Rate Quota (TRQ). Greasy wool imported under the TRQ is subject to a 1pc tariff. If Australian wool export volumes cause the Tariff Rate Quota  being exceeded — which has not previously occurred — a 38pc duty would be applied to imports from all countries.

WoolProducers Australia chief executive officer Jo Hall said while the 5pc increase in tariff-free quota for Australian wool going into China was part of a scheduled increase under ChAFTA, it is very pleasing for us as an industry to see China continuing to uphold their commitment to this agreement, which demonstrates the respectful and mutually beneficial relationship that the Australian and Chinese wool industry has.

A Department of Foreign Affairs and Trade spokesperson said Australian wool producers are gaining increased access to China through the ChAFTA.

“ChAFTA is providing new opportunities for Australian businesses, including delivering seven rounds of tariff cuts.”


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