Australia’s agricultural sector will receive a boost following the signing of a free-trade agreement with Peru, with 99 per cent of tariffs to be abolished.
The deal signals big wins for a number of sectors including the dairy, grains and red meat industries, building on Australia’s existing $590 million trade partnership with the South American country.
Australia exported $6.7 million in agricultural products to Peru in 2016 and imported $114 million worth of goods, yet Australian beef, dairy, horticulture and wine have been effectively shut out of the Peruvian market due to tariff barriers.
Peru-Australia Free Trade Agreement will see Australia receive improved market access for dairy in the form of an export quota of 7000 tonnes of dairy product in the first year of implementation, rising by 300 tonnes per annum and peaking at 10000 tonnes in the 10th year.
Australia Dairy Industry Council chair Terry Richardson said the new agreement was a positive step forward for the industry, especially considering Peru has historically been a sensitive market for dairy imports.
The initial Country Specific Quota volume exceeds recent trading volumes, which have varied over the past two decades from a high of 5931 tonnes of dairy products exported in 2002 to a low of 92 tonnes in 2014.
‘‘International trade is essential for the growth of our industry. Increased market access promotes stronger demand for Australian products, which helps underpin local farm gate milk returns and provides a framework for profitable industry growth,’’ Mr Richardson said.
PAFTA will see current tariffs of 11 to 17 per cent on beef eliminated on implementation of the agreement or within five years, a nine per cent tariff on sheep and goat meat eliminated, and the elimination of tariffs for further processed meat products on implementation of the agreement or within five years.
Peru is forecast to triple its beef consumption by 2020 and its sheepmeat is expected to increase by 20 per cent by 2025.
Export Council of Australia chief executive officer Lisa McAuley welcomed the deal, calling it a win for exporters.
‘‘... part of the value of (free-trade agreements) is they put a country on the map for exporters. For some sectors, Peru and South America more broadly can offer far better business opportunities than Asia,’’ Ms McAuley said.