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More trade certainty for live cattle and red meat exports to Indonesia

01 July 2020

Key points:

  • The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will enter into force on 5 July 2020.

IA-CEPA is expected to further support Australian beef and live cattle exports to meet the rapidly rising demand for beef in Indonesia. The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will enter into force on 5 July 2020, paving the way for more trade certainty for live cattle exports and the elimination of tariffs for all boxed product exported to Indonesia.

Here, we talk to MLA’s Global Manager – Trade and Market Access, Andrew McCallum, about how the IA-CEPA will benefit red meat producers.

“The IA-CEPA is a big win for producers across Australia – tariffs will disappear and there’s more guaranteed access for live cattle exports,” Andrew said.

Benefits of the IA-CEPA to the Australian red meat and livestock industry include:

1. Duty-free quota for 575,000 head of live male cattle in the first year, which will grow by 4% a year over five years to 700,000 head

2. Import permits to be issued automatically on an annual basis (without seasonal restrictions)

3. Liberalised access for live female cattle exported to Indonesia, with 0% tariffs from 5 July 2020 and no quota or import permit restrictions

4. Immediate or gradual liberalisation of tariffs applicable to boxed beef and sheepmeat exports to Indonesia, whereby those tariff lines not already benefiting from 0% tariffs secured under the ASEAN-Australia-New Zealand FTA will benefit from either a 0% or 2.5% tariff on entry (down from 5%). The tariffs will be eliminated altogether over five years.

Indonesia is an important trading partner for the Australian live cattle and beef industry – in fact, the trade was worth more than $1.2 billion in 2019.

“IA-CEPA is expected to further support Australian beef and live cattle exports to meet the rapidly rising demand for beef in Indonesia which is expected to grow 9% by 2022 to 839,000 tonnes carcase weight,” Andrew said.

“Security of markets allows Australian red meat businesses to continue to invest back into their supply chains and employ more Australians.

“In an increasingly competitive market, where Indonesia is granting access to numerous beef suppliers, the removal of these import tariffs will assist in maintaining Australian product’s cost competitiveness.”