Australian beef shipments to Korea hit tariff safeguard
18 October 2016
Australian beef export volumes to Korea have been performing very well this year, and are actually up 8% for the year-to-September.
However, under the Korea-Australia Free Trade Agreement (FTA), there is a discretionary safeguard if imports exceed set levels (2016 level is 160,829 tonnes swt) whereby the tariff reverts back to 40%. As of 16 October 2016, the reported customs cleared volumes into Korea were 160,466 tonnes swt (99.76% safeguard levels).
Reports suggest that the Korea Government are planning to activate the discretionary safeguard and revert to the 40% tariff level until end of December 2016. All product on the water at the time of the triggering the safeguard will be cleared at the current tariff rate 32%, however these volumes will be deducted from the 2017 safeguard volumes.
As per the FTA tariff schedule, the tariff will drop to 29.4% on the 1st of January 2017 as part of the ongoing rollout of the FTA.
Potential impacts on the Australian cattle market are only likely to be minimal, especially considering the short timeframe the 40% tariff will be administered, stable currency movements between the A$ and Korean Won, and tighter cattle availability compared to previous years.
The table below illustrates the tariff schedule and safeguard rates for coming years.
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