Wide-ranging wins for farmers are the heart of the much-anticipated Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), to be completed in Jakarta today.
National Farmers’ Federation CEO Tony Mahar has accompanied Trade Minister Simon Birmingham to Indonesia for the signing.
“Today represents real tangible benefits to the hip pocket of many Australian farmers.
“IA-CEPA will deliver improved market access for live cattle, feed grains, beef, sheepmeat, dairy, sugar, fruit, carrots, potatoes and honey.”
Mr Mahar said Australian agriculture already enjoyed a valuable trade relationship with Indonesia.
“Indonesia is the world’s biggest importer of Australian wheat and Australia is Indonesia’s largest supplier of red meat. Australian dairy products and sugar are also highly valued by our neighbour.”
“In 2017, almost half (49.5%) of our food and fibre exports went to Indonesia, valued at $3.5 billion.”
However, Mr Mahar said international competitors increasingly challenged Australian agriculture’s market share in Indonesia, including wheat from the Black Sea and red meat from North and South America.
“In many instances, IA-CEPA will strengthen Australia’s role as the preferred supplier to the burgeoning south-east Asian economy.
“For example, IA-CEPA will significantly grow the quota for Australian cattle to be exported with duty free access for 575,000 head of live male cattle per year, growing at 4% per year to 700,000.
“Carrots, Australia’s largest vegetable export, are at the forefront of the agreement with tariffs to be cut to 10% (down from 25%) for 5000 tonnes per year, increasing to 10,000 tonnes after 10 years, and tariffs eliminated after 15 years.
“The tariff relief represents an extra $5 million to $10 million to Australia’s fresh vegetable exports per annum.”
Mr Mahar said it was now up to the Australian Parliament to ensure the landmark trade agreement was ratified.
“Enhancing Australia’s agricultural exports must have the support of the whole Parliament.
“It is a matter of significant national importance that free trade agreements, like IA-CEPA, some eight years in the making and the on-foot, Peru-Australia FTA, enjoy bipartisan support and rapid passage through both Houses.
“In the face of drought and floods, it is vital that the future interests of farmers are not compromised by short-term partisan politics.”
The NFF is supported by the Government and the Opposition, in its vision for agriculture to achieve a farm gate output of $100 billion by 2030 – up from the current $60 billion.
“More than 70 per cent of Australia’s agricultural production is exported.
“Breaking down tariff and non-tariff barriers and expanding market access is therefore a key priority in the NFF’s Roadmap to achieve $100 billion.
“A stronger agricultural sector means more jobs, more jobs mean more sustainable, more vibrant regional communities and an overall stronger national economy.”
Agriculture wins in IA-CEPA
• Carrots: Tariff cut immediately to 10% (from 25%) for 5,000 tonnes per year; tariff further reduced over time, down to 0% after 15 years for an unlimited volume.
• Citrus: Improved access for key Australian citrus exports:
• Mandarins – tariff cut immediately to 10% (from 25%) for 7,500 tonnes per year; tariff further reduced over time, down to 0% after 20 years for an unlimited volume.
• Oranges – duty free access for 10,000 tonnes of oranges per year, increasing 5% each year
• Lemons and limes – duty free access for 5,000 tonnes of lemons and limes per year, increasing 2.5% each year.
• Dairy: Immediate elimination of 5% tariff for Milk and cream, concentrated or containing added sugar or other sweetening matter. Immediate elimination of 5% tariff for Grated or powdered cheese, of all kinds.
• Frozen beef and sheepmeat: Remaining tariffs on all Australian exports of frozen beef and sheepmeat into Indonesia reduced to 2.5% immediately, and eliminated after 5 years.
• Feed grains: Guaranteed duty free access for 500,000 tonnes of feed grains per year (wheat, barley, sorghum), increasing at 5% per year. This builds on current exports of Australian wheat to Indonesia, one of our most important wheat markets.
• Honey: Elimination of 5% tariff on Australian honey after 15 years.
• Live cattle: Duty free access for 575,000 head of live male cattle per year, growing at 4% per year to 700,000. A review mechanism in year 6 will consider subsequent increases.
• Sugar: Confirmation of the early outcome in 2017, reducing the tariff on Australian sugar to 5% (from 8-12%).
• Potatoes: Tariff cut immediately to 10% (from 25%) for 10,000 tonnes per year; after five years tariff further reduced to 5% for 12,500 tonnes per year, increasing by 2.5% per year.