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Rice misses out on tariff relief

The beef and dairy industries have welcomed the new trade agreement with South Korea but the rice industry has been left high and dry.

December 10, 2013 4:01am

Dairy is expected to benefit from tariff relief.


The Ricegrowers’ Association of Australia has expressed disappointment with the announcement and said the agreement was not really ‘‘free’’ if a whole industry was excluded.

Prime Minister Tony Abbott told parliament Trade Minister Andrew Robb had successfully concluded negotiations with Korea, which is Australia’s third-largest export market.

‘‘Under this agreement, tariffs will be eliminated on Australia’s major exports to Korea and there will be significant new market openings in services and investment,’’ he said.

Tariffs will be phased out over the next 15 years on products such as beef, wheat, dairy, sugar, wine, seafood and fruits.

The beef and sheep industry South Korea Taskforce spokesman Stephen Kelly expressed appreciation that the government was able to progress negotiations with South Korea, and to secure an agreement that is equivalent to the United States in terms of tariff reductions over time.

‘‘The successful negotiation of an FTA with South Korea that is equivalent to the US in terms of tariff reductions, and sees the removal of the current 40 per cent tariff over 15 years, has been a priority for the Australian beef industry for a number of years,’’ Mr Kelly said.

‘‘It also sees the phasing out of the 22.5 per cent sheepmeat tariffs over 10 years.’’

The new agreement could return about $30 million of tariff payments back into dairy farmers’ pockets.

‘‘Our dairy farmers and processors are paying up to $35million a year in import tariffs on dairy produce going into South Korea,’’ UDV president Kerry Callow said.

‘‘Getting rid of import tariffs is a win for Australia’s dairy industry and for South Korean consumers.’’

According to Dairy Australia’s Trade and the Australian Dairy Industry report, the South Korean Government collected $35million in import tariffs on Aussie milk powders, cheese and butter in 2011 and another $27million in 2012.

In 2011-12 Australia exported 27349tonnes of dairy products to South Korea, worth $116million, with another $88million of exports in 2012-13.

It is expected that the FTA with South Korea will result in import tariffs being wound down to zero over several years, but that tariff-free quotas will be put in place on specific volumes of cheese, infant formula and butter from day one of the agreement.

Rice Growers Association executive director Ruth Wade said the rice industry had worked closely with the Federal Government to develop comprehensive trade agreements including FTAs with Korea, Japan and China and the Trans Pacific Partnership.

She said the outcome for the rice industry was particularly disappointing.

‘‘Australian rice growers are recognised as the most efficient in the world. This announcement punishes Australian growers by preventing expansion into this important market,’’ Ms Wade said.

‘‘This is an FTA in name only. Trade agreements with exclusions are not free trade agreements.’’

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