Fair trade – what’s the beef?

LOCAL beef producers will have a fairer playing field on imports to Korea when the Korea-Australia Free Trade Agreement (KAFTA) comes into force tomorrow.
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 United States – Australia’s major competitor in the Korean market, spokesman for the KAFTA Australian red meat industry taskforce Stephen Kelly said.
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 32 per cent tariff (ie an eight per cent tariff preference) from 1 January 2014.
“Entry into force on 12 December and the consequent first tariff cut for Australian beef will reduce the eight per cent margin to a more commercially viable 5.3 per cent and ensure that the tariff differential is no greater than 5.4 per cent 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 timeframe (with the second cut due on 1 January 2015), will be positive to the tune of around $20 million to $40 million per annum.”
Australian sheepmeat, which currently faces a 22.5 per cent tariff, will also be a beneficiary via two successive tariff cuts, as will Australian offal (18-27 per cent tariffs) and further processed meat products (two to 72 per cent tariffs).