AUSVEG, the industry representative for Australia’s vegetable and potato growers, has welcomed the support of the Joint Standing Committee on Treaties (JSCOT) for the Indonesia – Australia Comprehensive Economic Partnership Agreement (IA-CEPA) and is urging parliament to act quickly to ratify the agreement, as it will help Australian vegetable growers looking to export into this growing market.
“The agreement to increase import quotas and decrease tariffs for carrot and potato exports – two of the Australian vegetable industry’s key export crops – will lead to an immediate increase in the trade of these commodities to Indonesia and must be ratified now that it has the support of the JSCOT,” said AUSVEG CEO James Whiteside.
“The IA-CEPA is an important trade agreement that aligns closely with our industry’s increased activities in market development – given Indonesia is predicted to have the world’s fifth largest economy by 2030, it will help ensure that Australia, and its horticulture producers, will be able to benefit from the country’s expected economic growth.
“Our growers have been waiting long enough for this important agreement, which was finalised last year and signed earlier this year, to be ratified so that they can take advantage of the more favourable trade conditions that are outlined in IA-CEPA.”
The IA-CEPA will facilitate closer economic engagement between Australia and Indonesia and improve two-way trade between the two countries, providing opportunities for Australia’s fresh vegetable exporters.
In the 2018/19 financial year, Australian vegetable exports to Indonesia were valued at $5 million, with the top commodity being potatoes, which accounts for over 40 per cent of this total. Given Indonesia’s developing population and its proximity to Australia, this market has strong potential for local growers to boost their fresh vegetable exports.
Key outcomes for the vegetable industry from IA-CEPA are:
· Carrots – Increased import quota of 5,000t per year, growing to 10,000t per year after 10 years, with a decreasing tariff schedule during this time.
· Potatoes – Increased import quota of 10,000t per year, growing to 12,500t per year after five years, with a decreasing tariff schedule during this time.
The vegetable industry is seeking to increase its export value to $315 million per year by 2020, an increase of 40 per cent from 2016.
“Trade agreements with neighbouring countries, such as the IA-CEPA,help provide our industry with confidence that it can continue to prosper through developing export markets, which helps secure the profitability and competitiveness of the Australian vegetable industry,” said Mr Whiteside.