Mexican tequila and Canadian whiskey cheaper under Trans-Pacific Partnership deal removing tariffs

PRICES of some popular imported spirits are set to fall as their tariffs are abolished under the new Trans-Pacific Partnership.

Alcohol

EXCLUSIVE

MEXICAN tequila and Canadian whiskey will become cheaper due to the new Trans-Pacific Partnership.

The agreement — which Trade Minister Andrew Robb signed earlier this week, covering 12 nations and 40 per cent of the world’s economy — is the biggest deal of its type in two decades and has been hailed as having the potential to open up new markets for Australian exporters.

But there will be wins for local consumers, too.

While very little is known about the details of the deal, News Corp Australia has been told the five per cent tariff on tequila from Mexico will be dumped. In 2007, $US10 million (AU$14 million) of spirits was imported to Australia from Mexico.

“Wow, that means the price of alcohol will come down,” said Mexican Liquor Imports office manager Chris McAllister of Melbourne. She estimated the tariff saving on a bottle of Calavera tequila blanco would be about $2. That high-end tequila retails for $90.

Federal Minister for Trade and Investment Andrew Robb signed the Trans-Pacific Partnership in Atlanta, Georgia, on Monday. Picture: EPA/Erik Lesser

About $US45 million of beer was imported, although it is tariff-free.

The president of the Australia, New Zealand, Mexico Chamber of Commerce and Industry Victor Del Rio said: “The whole agreement has to be very positive for Australia and the three Latin American countries involved”, Mexico, Peru and Chile.

Lovers of Canadian Club will also save.

“Australia applies a five per cent tariff on cosmetics from Canada and Canadian whiskey which will be eliminated in the TPP,” a DFAT spokeswoman said.

The import duty on tinned asparagus from Peru will also go and the government has vowed that the price of medicines will not rise, contrary to the fears of some.

The Trans-Pacific Partnership (TPP) has the benefits of several free trade agreements in one as barrier after barrier falls, said economist Tim Harcourt, of the UNSW Australia Business School and formerly Austrade.

“You are not getting a one-person lap-dance, you are now getting a strip-show,” Mr Harcourt said.

Canadian Club Whisky. Picture: Supplied

Calavera tequila blanco. Picture: Supplied

Groups including Choice have said the TPP could extend pharmaceutical companies’ monopoly provisions and therefore make medication costs skyrocket.

The DFAT spokeswoman said that was untrue. There was no change.

The nations covered by the TPP are Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

The official text is yet to be released. Australia’s involvement has to be ratified by Federal Parliament. Labor wants to see the detail before deciding its position but trade spokeswoman Penny Wong has said “the TPP has significant potential benefits for Australia including improving market access for our goods and services”.