What you need to know: CPTPP

14 March 2018

Here, MLA's General Manager for International Markets, Michael Finucan, explains more about the CPTPP and what it means for Australia.

What is the CPTPP? 

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is a landmark trade deal involving 11 countries - Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The agreement was officially signed by all participating nations in Chile last week and is the largest agreement of its kind and the result of many years of negotiations.

Our industry has been a strong supporter of the Australian Government’s efforts in pursuing these negotiations, given the prospect  of improving the competitiveness of Australian product in our international markets.

The implementation of the CPTPP agreement will help to ensure that the Australian red meat supply chain remains internationally competitive with more seamless trade rules, reduced costs and less red tape making it easier for our sector to respond to the growing consumer demand across much of the Asia-Pacific region

What are the benefits for the red meat industry of the CPTPP?

The CPTPP benefits will add significant value to the Australian red meat and livestock industry and complement the gains derived from the other free trade agreements Australia has concluded to date.  Once in force, it will see enhanced market access gains in key red meat markets such as Japan, Mexico and Canada, and offer new export opportunities across the Asia-Pacific region.

At a glance, the benefits for the red meat industry by market include:

Japan

  • Under the CPTPP, the tariffs levied on Australian beef entering Japan will be further reduced from those negotiated under the Japan-Australia Economic Partnership Agreement (JAEPA).
  • The tariff on both frozen and chilled beef will fall to 9% over 15 years – as opposed to the end point of 19.5% for frozen beef and 23.5% for chilled beef secured under the JAEPA.  All CPTPP member countries supplying beef to Japan will be similarly advantaged by these CPTPP tariff cuts.  A global beef safeguard provision will apply to this trade.
  • In addition, processed red meat import tariffs applied by Japan, which currently range from 6-50%, will be eliminated within 15 years; the majority of offal tariffs eliminated within 10-15 years; and the tariffs applied to live cattle imports will also be eliminated.

Canada 

  • In Canada, the current 35,000 tonne beef quota (0% in-quota tariff) will remain, however, the above quota tariff of 26.5% will be phased out.  Additionally, the 2.5% tariff on Australian sheepmeat will be eliminated on entry into force (EIF).

Mexico

  • For Australia’s trade to Mexico, the current 20-25% beef tariff will be eliminated within 10 years; the 10% sheepmeat and goat meat tariffs will be eliminated within 8 years; the majority of offal tariffs will be eliminated on EIF; and the 10-15% tariffs on live animals will also be eliminated on EIF.

Peru

  • In Peru, the CPTPP will complement the recently concluded Peru-Australia Free Trade Agreement, which will see the 11-17% tariffs on beef phased out and the 9% sheepmeat and goat meat tariffs eliminated on EIF under both agreements. Peru represents a new market opportunity for Australian red meat (pending the development of protocol arrangements).

Brunei, Chile, Malaysia, New Zealand, Singapore and Vietnam

  • For these remaining CPTPP members, existing bilateral and / or regional agreements have, or are already delivering, market access improvements.

What are the next steps?

The CPTPP will enter into force when at least half of the signatories have completed their domestic ratification processes.  In line with Australia’s treaty-making processes, the text of the agreement will be tabled in the Australian Parliament now the agreement has been signed.  The Joint Standing Committee on Treaties (JSCOT) would then conduct an inquiry and report and the Australian Parliament would consider any legislation or amendments to existing legislation that may be necessary to implement the agreement.

Industry will continue to advocate for swift ratification and entry into force of the CPTPP, with the first tranche of tariff cuts being an important step in realising the benefits of the agreement.

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