All remaining tariffs on dairy exports into Indonesia will eventually be scrapped as part of a new economic partnership agreement signed last week.
As part of the Indonesia-Australia Comprehensive Economic Partnership Agreement, tariffs will be removed on entry for skim milk powder, whole milk powder and grated and powdered cheese, while remaining tariffs will be eliminated by 2026 for non-liquid milk and by 2033 for liquid milk.
Peak dairy industry body, the Australian Dairy Industry Council, welcomed the deal, saying it will create a closer relationship with one of Australia’s largest trading partners.
‘‘As Australia’s close neighbour with strong existing ties with our dairy industry, the conclusion of IA-CEPA will enhance the naturally emerging opportunities that are presenting themselves in Indonesia,’’ ADIC chair Terry Richardson said.
The agreement also includes a co-operative mechanism to enable regular discussion of non-tariff measures.
‘‘These NTMs, including measures such as licensing arrangements and product testing regulations, can be significant hurdles for Australian dairy exports into markets like Indonesia and add significant costs to doing business,’’ Mr Richardson said.
Indonesia is a major destination for Australian dairy exports and ranks only behind China and Japan as Australia’s third-largest dairy export market on value terms.
In 2017-18, Australia exported more than 60000 tonnes of dairy to that market, valued at more than $200million.
VFF president David Jochinke said the agreement’s benefits would flow to a range of sectors.
‘‘This is a significant win for Victorian farmers and it will deliver real results for farmers across a wide range of commodities, include livestock, grains, dairy and horticulture,’’ he said.
‘‘Indonesia is already one of our greatest trading partners. In 2017, food and fibre exports to Indonesia were worth $3.5billion for Australia’s economy.
‘‘This trade agreement will serve to strengthen our trade relationship and maintain or even grow Australia’s market share in Indonesia.’’