Japan Beef Exports to Australia 2018
WHILE Australian beef continues to struggle for competitiveness in international markets due to shortage of slaughter stock, high cattle prices relative to other international suppliers, and cost-to-operate in the processing sector, some further relief is beingness experienced in the latest round of tariff adjustments in cardinal export client countries.
January 1 signalled some other cycle of annual tariff and quota relaxations on cherry meat exports in customer countries like Korea, China and the U.s.a. where Costless Trade Agreements are in activeness. Reductions under the Nippon-Australia FTA will have identify a fiddling later, from April 1, in line with the new Japanese financial year cycle.
2018 tariffs/quotas applicative to Australian beef
Click table for a larger view
In Japan, Commonwealth of australia's largest beef export market past book and value, tariffs paid on Australian imported chilled and frozen beef continue to pass up as part of the Nippon-Australia Economic Partnership Understanding (JAEPA) which came into force on January 1, 2015. JAEPA is past far the most liberalising trade understanding Japan has ever concluded.
As outlined in the tabular array published above, from April 1, our chilled beef exports to Nippon will exist tariffed at 29.3pc, a further 0.6pc reduction on last year. In comparison, US beef exporters, without the do good of an FTA, volition go along to pay the MFN (base of operations) beef tariff into Japan of 38.5pc. This year, it provides Australian exporters with a ix.2pc tariff advantage over the US.
Our frozen exports to Nippon will fall fifty-fifty further, attracting a tariff from April of 26.9pc, downwardly another 0.4pc on final twelvemonth. That represents an xi.6pc advantage compared with the 38.5pc tariff to be paid by the Usa.
To make matters worse for the US, in the current Japanese beef trading year ending March thirty, the US has been forced to pay an even higher 50pc tariff on frozen beef exports to Japan, after the country'southward frozen safeguard market protection machinery was triggered terminal August. The safeguard, which applies to all supplier countries not covered past an FTA, remains in place until the new Japanese fiscal twelvemonth. Crucially, Australia is not impacted because of the JAEPA understanding.
While Australia's tariff adjustments from year to year into markets like Nihon may appear to exist minor, it is the accumulation of those 'small gains' over the period of the enactment of the FTA that is important. By the end of the Japan FTA implementation period in 2028, Australia'southward tariff on chilled beef to Nihon will take dropped to 23.5pc, while frozen volition take dropped to nineteen.5pc. The reason for the difference is that the imported frozen beef market is considered less impactful to Nihon'due south own domestic beefiness product than chilled imports.
China similar
A similar competitive advantage for Australia is emerging in the China market, where Commonwealth of australia's 2015 ChAFTA understanding sees this year's beefiness exports attracting a tariff of 7.2pc, versus viii.4pc terminal twelvemonth. This compares with a tariff of 12pc imposed on United states and Brazilian exporters to China, neither of which yet enjoy the benefit of an FTA trading agreement.
Tariffs on Australian beef into Cathay, which in pre-understanding days ranged from 12pc for fresh beef to 25pc on some value-added products, volition exist eliminated birthday into China inside 6 years. Ten percentage tariffs on live cattle and sheep disappear afterwards year four of the Red china understanding, while offal and hides tariffs will also gradually recede.
Unlike circumstances in Korea
Commonwealth of australia's beef merchandise competitiveness into South korea are somewhat dissimilar, considering the US'south KORUS merchandise agreement with Korea pre-dates Australia's own KAFTA agreement by two years, guaranteeing that the U.s. volition go along to bask a tariff advantage over Commonwealth of australia for some years to come up.
This twelvemonth for example, the U.s.a. pays a tariff of 21.3pc for chilled and frozen beefiness into Korea, while Australia'southward ain schedule of reductions – 2 years behind the Us – will encounter our tariff at 26.6pc. As fourth dimension goes by, notwithstanding, that competitive gap will narrow: the US will pay no tariff whatsoever on beef from 2026 (now but eight years away), while the same will apply on Australia from 2028.
Prior to the trade agreements being struck with Korea, both exporting countries paid a tariff of 40pc on chilled and frozen beef.
Australia's US quota unchanged this year
Different other export customer countries listed above, Australia's access to the US marketplace is limited primarily by duty-costless book quota, rather than tariff. Since the AUSFTA agreement was struck 13 years ago, our Usa beef quota has gradually risen from about 350,000t, to 423,214t last yr. That figure does non change in 2018, just expands again adjacent year, adding an additional 5000t of duty-free quota, to 428,214t (see table below).
The gradual yearly increment in the US quota allowance for Commonwealth of australia reduces the risk of hitting the quota trigger point, after which a tariff of 17.6pc would be paid (highly unlikely while Commonwealth of australia's beef herd is still recovering from xx year lows).
Prior to Australia's FTA with the Usa existence activated in 2005, we paid an in-quota tariff of US4.4c/kg and 4-10pc for processed beef.
From 2023, the volume of duty-free quota into the US will exist unlimited.
For other exporting countries like Brazil, withal – just starting to penetrate the United states chilled and frozen beef marketplace subsequently decades of exclusion due to FMD concerns – the tariff and quota levels into the The states are of significant concern. Brazil has no formal FTA with the US, and is currently forced to export to the U.s. under the 'other country' quota of just 64,800t. It shares that quota with several other exporting countries.
In society to shift larger volumes of beef into the United states of america, Brazil would be forced to pay the total MFN (base) beefiness tariff of 26.4pc. While Brazilian exports to the US are currently suspended due to final year'south food safety and corruption issues, Brazil has high expectations of regaining US admission this year.
Some analysts says Brazil may exist prepared to absorb the full MFN tariff of 26.4pc in order to gain access, because of the competitiveness of Brazilian beef on the globe phase.
Source: https://www.beefcentral.com/trade/2018-tariff-adjustments-deliver-export-impetus-for-australia/
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