Australia saves millions with trade deal

By Jamie Salter

Australia's dairy industry is set to be one of the biggest winners out of a new Indonesia-Australia trade deal.

The Indonesia-Australia Comprehensive Economic Partnership Agreement, which came into effect on July 5, will build upon the ASEAN-Australia-New Zealand Free Trade Agreement by immediately cutting existing tariffs.

Existing tariffs on skim-milk powder, whole-milk powder and grated and powdered cheese will be immediately removed.

Remaining tariffs on liquid milk will also be phased out by 2033, giving Australian dairy a competitive advantage over major dairy competitors in that market.

Australian Dairy Industry Council chair Terry Richardson welcomed the deal and said it would 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, launching IA-CEPA will enhance the naturally emerging opportunities that are presenting themselves in Indonesia,” Mr Richardson said.

Live cattle exports will have duty-free access for 575,000 cattle in 2020, with a four per cent annual growth in volume, reaching 700,000 by 2026.

For frozen beef and sheep meat, tariffs have been immediately cut from five per cent to 2.5 per cent, and will be eliminated entirely by 2025.

Feed grains will have duty free access for 500,000 tonnes in 2020, with a five per cent annual growth volume.

The IA-CEPA and AANZFTA will together provide an estimated saving of more than A$10.5 million in tariffs that would otherwise be levied on Australian dairy exports to Indonesia.

Federal Trade Minister Simon Birmingham said the agreement with Indonesia would provide an export boost for Australian farmers and businesses who had been doing it tough during the COVID-19 crisis.

“There are major wins across the board for Australian farmers — producers of grains, live cattle and meat, dairy and horticulture, and many other products will benefit from lower tariffs and improved access to Indonesian markets,” Mr Birmingham said.

“This is the most comprehensive bilateral trade agreement Indonesia has ever signed, and will give our exporters a competitive edge in what is one of the fastest growing economies in the world.”