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Trans-Pacific Partnership agreement must lift prices

Sheep Central, October 6, 2015
Sheepmeats Council of Australia president Jeff Murray

Sheepmeat Council of Australia president Jeff Murray

AUSTRALIA’S sheep producers would not benefit from the Trans-Pacific Partnership agreement unless improved market access was reflected in farm gate prices, Sheepmeat Council of Australia president Jeff Murray said today.

Mr Murray said sheep meat producers would benefit most from the Trans-Pacific Partnership agreement in markets which currently have significant import tariffs.

“Mexico will be one of the major ones and there is a bit of an opportunity for lamb into Canada.”

Korea and Japan are minor sheep meat users, he said.

But although good seasons were needed for sheep farmers to lift production to supply any new market orders, farm gate prices were important, Mr Murray said.

“It also has to be coupled with price, because unless we get money at the farm gate, it won’t happen anyway.”

Meat and Livestock Australia said Australia’s red meat and livestock sectors are expected to benefit from improved market access arrangements following the conclusion of TPP negotiations in the United States yesterday. The TPP member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam.

Under the TPP, the 10 percent sheep meat and goat meat tariffs into Mexico will end within eight years. The majority of offal tariffs and the 10-15pc tariffs on live animals will be eliminated when the TPP agreement comes into force, MLA said.

In Canada, the 2.5pc tariff on Australian sheep meat will end when the agreement comes into force. In Peru, the 9pc sheep meat and goat meat tariffs will be eliminated, MLA said.

Under the TPP, processed red meat import tariffs applied by Japan, which currently range from 6-50pc, will be eliminated within 15 years. Most offal tariffs will end within 10-15 years.

TPP benefits for wool industry unclear

Australia already has Free Trade Agreements specifying zero tariffs for wool imports with Japan, Korea and Thailand so export gains are expected to be minor to these countries. But WoolProducers Australia chief executive officer Jo Hall said the TPP agreement was expected to be generally beneficial to the industry.

“The TPP details for wool are scant at the moment,” she said.

TPP to eliminate tariffs on $4.3 billion in exports

Minister for Agriculture and Water Resources, Barnaby Joyce, said Australia currently exports around 33 percent of its agricultural products to TPP countries, worth about $15 billion, with many products currently facing high tariffs.

“The TPP will eliminate tariffs on more than $4.3 billion worth of exports of Australian agricultural products.

“Reduced tariffs and improved access to TPP countries will be available for beef, sheep meat, pork, livestock, dairy, wine, seafood, wool, cotton, grains and a range of horticultural products,” he said.

Red meat peak council chairs welcome TPP

A statement yesterday from the joint chairs of Australian red meat and livestock industry peak councils said the TPP benefits are most welcome and importantly complement the gains already secured for the Australian red meat and livestock industry from the recent suite of FTAs Australia has previously concluded.

“TPP members account for about 52pc of Australia’s beef, sheepmeat and offal trade and the existing import tariffs applicable to Australia’s exports destined for TPP markets represent an annual tax on the supply chain of around $1 billion.

“The gradual removal of this cost burden will positively impact the profitability of Australian cattle and sheep producers, processors and exporters,” the peak council chairs said.

“The implementation of the TPP agreement will also help to ensure that the Australian red meat supply chain remains internationally competitive – with more seamless trade rules, reduced costs and less red tape making it easier for our sector to respond to the growing consumer demand across much of the Asia-Pacific region.”

Major TPP gains will be felt in beef industry

MLA said under the TPP, the tariffs levied on Australian beef entering Japan will be further reduced from those negotiated under the Japan-Australia Economic Partnership Agreement (JAEPA). The tariff on both frozen and chilled beef will fall to 9pc over 15 years – as opposed to the end point of 19.5pc for frozen beef and 23.5pc for chilled beef secured under the JAEPA. All TPP member countries supplying beef to Japan will be similarly advantaged by these TPP tariff cuts. A global beef safeguard provision will apply to this trade, MLA said.

In Canada, the current 35,000 tonne beef quota (0pc in-quota tariff) will remain. However, the above quota tariff of 26.5pc will be phased out, MLA said.

For Australia’s trade to Mexico, the current 20-25pc beef tariff will be eliminated within 10 years, the majority of offal tariffs will be eliminated and the 10-15pc tariffs on live animals will also end. In Peru, the 17pc beef tariff will be phased out.

For the remaining TPP members, existing bilateral agreements have, or are already delivering market access improvements.

Sources: MLA, Sheepmeat Council of Australia, WoolProducers Australia.

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