CHINA will be able to apply tariffs on some imported fresh and frozen beef when imports reach a trigger point embedded within the China-Australia free trade agreement (ChAFTA).
A safeguard clause in the trade deal could be imposed when import volumes of beef carcases reach 170,000 tonnes, regardless of China's agreement to phase-out tariffs on imported beef over nine years.
The clarification of the contents of the ChAFTA, struck in 2014, came during a Brisbane hearing of the joint parliamentary committee on treaties on Monday, part of a national series of hearings examining the implementation of the trade deal.
According to agribusiness lawyer Lea Fua, China's safeguard clause allows it to add customs duties to fresh and frozen beef carcasses and meat.
"The concern here is that given the growth in Australian beef exports to China, which has been exponential in the last few years, the risk here is that the trigger will be reached fairly quickly and China is able to apply extra customs duty which appears to be against the spirit of chapter two (of the FTA)," Mr Fua said.
"While there is a review process included in chapter two (of the FTA) to consider removal of the safeguard, this process is not clearly set out.
"The availability of this safeguard to China only is concerning and we recommend (that) a clear process for the removal of the safeguard should be articulated."
Mr Fua is a lawyer with HopgoodGanim, and warned of similar sections of the ChAFTA applied to Chinese imports of Australian milk and cream solids.
Big winners?
News of China's tariff triggers comes only weeks after independent economic modelling of Australia’s FTAs with Korea, Japan and China suggested key agricultural export commodities would be big winners due to forecast tariff cuts in areas such as beef and dairy.
The Centre for International Economics (CIE) modelling was released ahead of the formal signing of the ChAFTA in Canberra in June.
The modelling said that after full implementation - in 2035 - there will be significant export growth in the three markets across a range of key agricultural goods.
CIE’s report says dairy exports will be 59 per cent higher, meat products like beef 42.9pc higher, vegetables, fruits and nuts 34pc higher, wool 22pc higher and sugar 24pc higher.
In June, Trade Minister Andrew Robb said the CIE’s independent modelling confirmed the substantial economic gains that will flow to Australia in the years and decades ahead, as a result of this powerful trifecta of trade agreements.
“These agreements have locked in our existing trade relations with the major economies of North Asia and will be the catalyst for further growth across goods, services and investment,” he said.
“The gains that will flow from these agreements explains the urgency the government placed in wanting to quickly conclude them.
“These agreements support growth, jobs and higher living standards for Australians.”
The Centre’s modelling said that Australian exports of goods to the three North Asian markets would be 11.7pc or nearly $17 billion larger in 2035, in today’s dollars, compared to not having the agreements.
- with Colin Bettles
