Red meat producers set to benefit from China-Australia trade deal

By Georgi Gyton

- Last updated on GMT

Meat & Livestock Australia has said the benefits could total AUS$11bn
Meat & Livestock Australia has said the benefits could total AUS$11bn

Related tags Australian beef Meat Beef Lamb

The Cattle Council of Australia (CCA) has said that "significant flow-through opportunities" exist for Australian beef producers following the signing of a China-Australia Free Trade Agreement (ChAFTA) today (17 November).

The ChAFTA, signed by Chinese president Xi Jinping and Australian prime minister Tony Abbot in Canberra, Australia, will see current tariffs on Australian beef eliminated over a nine-year period, and on sheep- and goat meat over eight years.

The current tariffs levied on Australian beef are 12-25%, and for sheep meat and goat tariffs are between 15-23%.

Tariffs for offal – currently 12-25% – will also be eliminated over a four- to 10-year period, and the 10% tariffs on live cattle and sheep will be eliminated over four years.

According to the CCA, the deal will place Australian beef in a favourable position against competitors in this particular market.

Howard Smith, newly elected president of the CCA, said the potential benefits of the agreement were huge.

"ChAFTA will remove a significant burden from the beef supply chain, in the form of removing tariffs currently imposed on chilled and frozen beef, live cattle and co-products, including offals and hides,"​ he said.

"It will also provide more opportunities for Chinese consumers to develop a taste for Australian beef, by alleviating the inflated prices currently paid for Australian beef due to import tariffs."

According to Meat & Livestock Australia, the red meat and livestock sector would benefit by as much as AUS$1 billion, due to the tariff elimination.

Smith continued: "In terms of farm-gate returns, economic modelling [Centre for International Economics] suggests that beef prices are estimated to increase by 8c/kg (dressed weight) above baseline level, should the current tariffs on beef be phased out to zero by 2024.

"There are also opportunities for increased farm-gate returns in the future through ensuring that producers are paid for the products they produce, including hides and offals."

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