Australia’s meat industry has warned that it is now “critical” that the Australia-South Korea free trade agreement (FTA) negotiations are concluded rapidly.
South Korea is the third-largest market for Australian beef, but currently imposes a 40% tariff on Australian beef exports. Speaking in Canberra earlier this week, Meat and Livestock Australia (MLA) manager for international markets and trade services Andrew McCallum said Australia would lose out to the US if this tariff was not removed.
“Having had an FTA implemented in March this year, the US has already had one tariff cut of 2.66% and they’ll get another 2.66% tariff cut on 1 January,” he said.
“Without an FTA, the Australian industry will be behind the eight ball in 2013 as we’ll lag behind the US tariff by 5.3%. While Australia’s market share so far hasn’t suffered, we expect some downward movement if the Australia-Korea FTA isn’t expedited.”
McCallum was speaking at parliamentary inquiry into trade relations with Japan and Korea. In its official submission to the inquiry, the MLA stressed the importance of these two markets to Australia’s beef and lamb exporters, and said it would support government and industry efforts to negotiate trade agreements.
“As two of the largest export markets for Australian beef, Japan and the Republic of Korea are vitally important for the future prosperity of the MLA’s producer members and the wider Australian red meat industry,” it said.
Calling for the completion of FTA negotiations with Japan, which began in April 2007, the MLA submission said: “The establishment of a preferential trading arrangement between Australia and Japan would enable the Australian red meat industry to respond unimpeded to growing Japanese consumer demand for high-quality, safe product.
"Japanese consumers would be the key beneficiaries of more competitively priced imported beef (via a potential reduction in retail and foodservice prices) at a time of escalating global food prices.”
It added that concluding the Australia-Korea FTA negotiations was “critical”, pointing out both the US and the European Union (EU) have entered into FTAs with South Korea.
“Comparable preferential tariff rates (with those of the US and EU) would enable the Australian industry to respond to growing Korean consumer demand for a high-quality, safe product,” it said.