Agriculture in the front seat in Indonesia-Australia trade deal
The long-awaited trade deal with our nearest neighbour will be a boon for Aussie exporters. See what benefits await for beef and sheep meat, live cattle, feed grains and horticulture.
MILLIONS in new export opportunities will open up to Australian farmers from July, with the new Indonesia-Australia trade deal finally coming into force.
A decade in the making, the Indonesia-Australia Comprehensive Economic Partnership Agreement will begin on July 5, bringing with it a boon for Aussie red meat, live cattle, grains and horticulture producers.
Trade Minister Simon Birmingham said the deal would give Australian exporters a “competitive edge” in a tough environment due to the coronavirus pandemic.
“With a population of 260 million and one of the fastest growing economies in the world, Indonesia presents significant trade and investment opportunities for Australian farmers and businesses,” Mr Birmingham said.
Australia already exports about $2.8 billion worth of agricultural goods to Indonesia and farmers have been keenly waiting to boost that figure through the new agreement.
The deal was anticipated to have come into force by this month after Indonesia’s parliament ratified it in February, however, the coronavirus pandemic is understood to have caused some administrative delays.
Under the deal, more than 99 per cent of Australian agricultural produce will have preferential access. Highlights include:
BEEF and SHEEP MEAT: Tariffs halved from 5 to 2.5 per cent from day one, and eliminated in five years;
LIVE CATTLE exports will be duty free for 575,000 head, increasing 4 per cent each year to 700,000;
FEED GRAINS: Duty free access for 500,000 tonnes of wheat, barley and sorghum, increasing by 5 per cent each year; and
HORTICULTURE tariff reductions worth up to $10 million to Australia’s fresh veggie exports.
In particular the tariff on carrots will be cut from 25 to 10 per cent for 5000 tonnes per year, and eliminated after 15 years.
Citrus is also a big winner, with tariff free access guaranteed for 10,000 tonnes of oranges (increasing 5 per cent each year) and 5000 tonnes of lemons and limes (increasing 2.5 per cent each year); while the 25 per cent tariff on mandarins will be cut to 10 per cent and progressively removed over 20 years.
The deal will also see tariffs eventually removed on all dairy products.
GrainGrowers chairman Brett Hosking said timing couldn’t be better for access to a new feed market.
“Good seasonal conditions across our east coast is seeing our growers planting this year’s crops with a high level of optimism and looking forward to a big crop,” Mr Hosking said.
Mr Birmingham said the current economic stress caused by COVID-19 made the agreement even more important.
“With one in five jobs trade-related, enhancing export opportunities for our farmers and businesses will be crucial to reducing job losses arising from the COVID-19 crisis and a critical part of our ultimate economic recovery,” he said.
The landmark deal is the most comprehensive Indonesia has negotiated, despite lingering protectionist sentiments, particularly in its agricultural sector.
Indonesia’s Deputy Trade Minister Jerry Sambuaga said in February some concerns about free trade remained in some quarters, but believed it would largely be “business as usual” as there is little crossover in the commodities each country usually imports or exports.
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