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Aussie exporters start New Year on a high

Aussie exporters start New Year on a high article image

Australian exporters have celebrated the New Year with another round of tariff reductions under the China-Australia Free Trade Agreement (ChAFTA) and Korea-Australia Free Trade Agreement (KAFTA).

Tariffs on Australian exports to China have now been cut twice in the past two weeks.

Initial reductions came into force on December 20, with a further reduction on January 1, this year.

Tariffs on exports to Korea have been cut three times since KAFTA came into force on December 12, 2014.

The positive results of these agreements are already being seen.

Senator Richard Colebeck, the Minister Assisting Trade Minister Andrew Robb reports that RBK Nutraceuticals, based in Sydney, have increased their exports into Korea by 161 per cent since the beginning of the agreement.

Tasmanian cherry growers have also enjoyed big increases in demand from Korea, with the state exporting 185 tonnes of cherries into Korea over last summer compared with just five tonnes the previous year.

Beef exports on the rise

And Australia’s beef exports increased more than 30 per cent to be worth over $550 million after the 2015 tariff reduction.

Senator Colebeck says the most recent tariff cuts will further strengthen these exports.

“Each year KAFTA puts up to $40 million back into the Australian beef industry instead of into paying tariffs, Senator Colebeck said.

“Importantly, these recent cuts also bring us closer to our competitors. Never again will the differential between Australia and USA beef exports be greater than 5.4 per cent.”

And Australia’s dairy industry has enjoyed similar success.

Exports of processed cheese, butter and dairy spreads to Korea are all up by over 50 per cent.

“From New Year’s Day 2016, under ChAFTA infant formula tariffs halve, providing extra momentum to this already booming trade,” said Senator Colebeck.

Resources and energy exports

“The additional tariff cuts will go further towards enhancing many of our major exports including wine, lamb, horticulture, seafood, processed foods, vitamins and other health products.”

Remaining tariffs on Australian resources and energy exports will also be further reduced.

“Together with our trade agreement with Japan, these ground-breaking deals provide transformational opportunities to export markets that already buy over 50 per cent of all Australian exports,” Senator Colebeck said.

Strong returns for farmers

Agriculture Minister Barnaby Joyce said KAFTA continues to deliver strong export returns to Australian farmers.

“Fresh, chilled and frozen beef, one of our major exports to Korea worth A$1.07 billion in 2014-15, will have the current tariff of 34.6 per cent further reduced to 32 per cent,” Mr Joyce said. “This is down from the original pre-KAFTA level of 40 per cent.

“Nuts are becoming an important export commodity to Korea, worth over $10 million in 2014-15. Almonds in shell will have the current tariff of 6.4 per cent reduced to 5.6 per cent, and macadamia nuts will have the current tariff of 18 per cent reduced to 12 per cent.

“Table grapes will have the current tariff (for our export season) of 18 per cent reduced to 12 per cent.

“Exports of Brussels sprouts will also become more commercially attractive with tariffs being lowered to 15.4 per cent from the current 19.2 per cent. This is down from 27 per cent pre-KAFTA.”

Australia’s ‘clean’ produce in demand

Minister Joyce said since entering into force just over 12 months ago, KAFTA had provided welcome increases in export revenue for many farmers.

“There’s no doubt Australia’s clean, safe produce is in demand in Korea, with exports of agrifood products flourishing since the introduction of KAFTA.”

Mr Joyce said the elimination of the 24 per cent tariff on cherries has resulted in exports worth $3.5 million in 2014-15.

“Fresh navel oranges have also seen strong growth, with exports increasing almost 700 per cent to $486,000 in 2014-15, as well as almonds which are up over 400 per cent to $0.5 million,” he said.

“Meat exports have always been one of our biggest exports to Korea, and as well as our top export of chilled and frozen beef, shipments of lamb have increased by approximately 35 per cent.

“These are very pleasing results and provide options for producers to develop new supply chains and increase farmgate returns.”

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