China FTA: How does it weigh up?

Posted on Wednesday, December 03, 2014 - Category: In the News

As New Zealand (NZ) Prime Minister, John Key has reportedly been working to ensure NZ’s dairy industry receives equal benefits to our industry, it’s clear that Australia’s free trade agreement (FTA) with China has weighed up very well.


With negotiations concluded and a Declaration of Intent signed on 17 November, the China-Australia FTA has delivered a significant confidence boost to the whole dairy value chain, with the outcomes presenting real opportunities for dairy to grow and prosper.


So what does the deal promise and how does it compare to NZ’s existing FTA with China?


While the FTA is currently in its legal review phase, it has secured the following tariff outcomes:
  • Elimination of the 15% tariff on infant formula over 4 years;
  •  Elimination of the 10 ‐ 19% tariff on ice cream, lactose, casein and milk albumins over 4 years;
  • Elimination of the 15% tariff on liquid milk over 9 years;
  • Elimination of the 10 ‐ 15% tariff on cheese, butter and yogurt over 9 years; and
  • Elimination of the 10% tariff on milk powders over 11 years.

In comparison to our trade deal, the China-NZ FTA contains restrictive safeguard measures on a wide range of dairy products, including liquid milk, cheese, butter and all milk powders. These safeguards or quotas mean that China raises the tariff back to the normal rate when NZ’s exports exceed a certain volume of product.

Under our FTA, Australian dairy will only face a discretionary safeguard on whole milk powders, with the safeguard trigger volume set well above current trade levels and indexed to grow annually. For all other dairy products there will be no safeguards and Australia will receive unlimited preferential access.

Australian Dairy Farmers (ADF) President, Noel Campbell said now that the deal has been done, the hard work begins – seizing the opportunities the agreement offers and making them work for our industry.

“The effects of the deal won’t be immediate, and to effectively capitalise on the improved market conditions, on-farm investment and upgrades to the industry’s infrastructure are necessary,” Mr Campbell said.

“The FTA with China opens the gate to the Chinese market, now it’s up to industry to work together to leverage the benefits.”

Mr Campbell thanked Minister for Trade and Investment, Andrew Robb, the Australian government, industry and the broader dairy community for its ongoing support throughout the negotiations.

Click here to download your copy of the Department of Foreign Affairs and Trade’s Implementation Timeline or see www.fta4dairy.com.au for more information.


 

Select Tags