What will free trade with China mean for producers?
03 July 2015
Successful international trade negotiations, such as the historic China-Australia Free Trade Agreement (ChAFTA) signed last month, are a ‘godsend for producers’ according to Queensland cattle producer Ian McCamley.
Winner of the ‘2013 Innovation in Red Meat Beef Producer of the Year’ award, Ian toured China last year and believes this agreement has the potential to deliver far higher returns to the farm gate.
“In discussions with two of the nation’s biggest importers, they considered paying $5/kg liveweight very reasonable,” he said.
“And their capacity to pay is a world away from ours.”
Ian highlighted livestock exports, particularly of feeder and ready-to-process cattle, as exciting opportunities. Boxed meat demand could also grow, he said, as Beijing phased out more street and wet markets.
Ian said our challenge would be the ability to supply.
“MLA’s background role in helping these deals come to fruition is a valuable investment of our producer levies,” Ian said.
“I’d much rather spend on this than continually push improvements to productivity.”
MLA Trade and Market Access Manager Andrew McCallum said MLA’s role in trade negotiations was to partner industry and provide the Federal Government with the rationale required for trade reform.
“MLA does not sit at the negotiating table, so we assist our trade officials by equipping them with the information required to secure the best possible outcomes for livestock, red meat and associated products,” Andrew said.
This includes provision of market intelligence, economic modelling, commercial insights and advice.
“ChAFTA was an important agreement to secure. It will ultimately deliver tariff-free access for our products and thereby remove significant costs from the supply chain.
“It will also help maintain our international competitiveness, particularly with New Zealand, as its beef and sheepmeat industries will benefit from zero tariffs into China next year.”
Taking off the tariffs
The outcomes of the ChAFTA include:
- Tariffs on Australian beef, of between 12-25%, will be eliminated over the next nine years.
- Sheep and goat meat tariffs, of between 12-23%, will be eliminated over 8 years.
- The 12-15% tariffs on offals will be eliminated over four to nine years;
- The 5-14% tariffs on hides and skins will be eliminated over four to eight years.
- The 10% tariffs on live cattle and sheep will be eliminated over four years.
Ian McCamley firstname.lastname@example.org
Andrew McCallum, MLA email@example.com
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