The Australian red meat industry has welcomed the news the Korea-Australia Free Trade Agreement (KAFTA) will come into force later this week.
This follows the recent ratification of the KAFTA Implementation Bills by the Australian Parliament and completion of a similar Bill approval process by the National Assembly of Korea, and it is scheduled to be enacted on Friday, December 12.
KAFTA Australian red meat industry taskforce spokesperson Stephen Kelly said industry welcomed the agreement.
"Not only is it seen as a mechanism for further improving the trading environment, but it is also a means to address the competitive disadvantage Australian beef faces versus beef imported by Korea from the US, (which is) Australia’s major competitor in the Korean market.”
US beef has been benefiting from tariff cuts following its 2012 FTA with Korea – with the previous 40 per cent tariff on beef being eliminated over 15 years to 2026 and US beef facing a 32pc tariff (ie an 8pc tariff preference) from the beginning of this calendar year.
“Entry into force on 12 December and the consequent first tariff cut for Australian beef will reduce the 8% margin to a more commercially viable 5.3pc and ensure that the tariff differential is no greater than 5.4pc for the duration of the phased elimination period,” Mr Kelly said.
“The financial impact on the Australian beef industry of achieving entry into force in 2014, and thus benefiting from two successive tariff cuts within a short time frame (with the second cut due on 1 January 2015), will be positive to the tune of around $20m - $40m per annum.”
Australian sheepmeat, which currently faces a 22.5pc tariff, will also be a beneficiary via two successive tariff cuts, as will Australian offal (18-27pc tariffs) and further processed meat products (2-72pc tariffs).
