Big boost for hides and sheepskin exports as Australia cements China FTA
20/11/2014
The 5-14% tariffs on hides and skins will be eliminated over four to eight years and the 10% tariffs on live cattle and live sheep will be eliminated over four years.
Once fully implemented, the free trade agreement with China has the potential to boost the gross value of beef production by $270 million annually by 2024, according to industry association Meat and Livestock Australia.
China takes a reported 90% of Australia’s sheepskins and 80% of cattle hides and so elimination of these tariffs, as well as those on offal, will add $436 million a year by 2024, it said. By 2030, these benefits could total $6 billion.
Chairman of the Australian Red Meat ChAFTA Taskforce David Larkin said: “The current tariffs imposed on Australian beef, sheepmeat and co-products exported to China represent an annual tax on the supply chain of around $826 million. The gradual removal of this cost burden will positively impact the profitability of Australian cattle and sheep producers, processors and exporters, not to mention alleviation of the inflated prices paid for Australian red meat and associated products by Chinese customers and consumers."
“As competition in China is also likely to escalate over the next few years as other suppliers potentially obtain improved access, Australia’s competitiveness is under threat – a demonstrable reason why Australia urgently needed a trade liberalising agreement.”
In 2013, 154,833 tonnes of beef; 97,423 tonnes of sheepmeat; 4,736 tonnes of goat meat; 8,044 tonnes of offal; 66,530 head of live cattle (predominantly dairy cows) and 3,472 live sheep were shipped from Australia to mainland China - representing an export return of $1.3 billion. China is also a significant market for co-products with the combined value of offal, hides, sheepskin, tallow, meat and bone meal and pet food exports worth over $1 billion.
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