1 January 2016
Australian exporters have extra reason to celebrate this New Year, with further tariff reductions under the China-Australia Free Trade Agreement (ChAFTA) and Korea-Australia Free Trade Agreement (KAFTA) kicking in from today.
Tariffs on Australian exports to China have now been cut twice in less than a fortnight, following initial reductions when ChAFTA entered into force on 20 December 2015. The tariff reductions on exports to Korea will be the third round of cuts under KAFTA, since its entry into force on 12 December 2014.
The positive results of these agreements are already being seen; RBK Nutraceuticals, based in Sydney, have increased their exports into Korea by a huge 161 per cent since the beginning of the agreement.
Tasmanian cherry growers have also enjoyed huge increases in demand due to the commencement of KAFTA with the state exporting 185 tonnes of cherries into Korea over last summer compared with just five tonnes the previous year.
Our beef exports increased more than 30 per cent to be worth over $550 million after the 2015 tariff reduction. The conditions are right for this year's tariff cut to strengthen the tailwinds for this valuable trade even further. Each year KAFTA puts up to $40m back into the Australian beef industry instead of into paying tariffs.
Importantly, these recent cuts also bring us closer to our competitors. Never again will the differential between Australia and USA beef exports be greater than 5.4 per cent.
It's a similar story for our dairy industry with exports of processed cheese, butter and dairy spreads to Korea all up by over 50 per cent and from New Year's Day 2016, under ChAFTA infant formula tariffs halve, providing extra momentum to this already booming trade.
The additional tariff cuts will go further towards enhancing many of our major exports including wine, lamb, horticulture, seafood, processed foods, vitamins and other health products. Remaining tariffs on Australian resources and energy exports will also be further reduced.
Together with our trade agreement with Japan, these ground-breaking deals provide transformational opportunities to export markets that already buy over 50 per cent of all Australian exports.
The powerful trifecta of agreements the Government has secured with China, Japan and Korea ensures our home-grown businesses are vastly more competitive in a market of more than 1.5 billion people. This extends not only to the goods that Australia is already well known for but in niches available but not yet fully realised. Examples include the 25 per cent tariff reduction for Australian honey products and a 21 per cent tariff reduction for our pearls under ChAFTA.
The tariff cuts for these quality Australian products give us significant advantages over our competitors in a market with ever growing demand and I encourage businesses - both existing and potential exporters - to take full advantage of the great opportunities available under Australia's FTAs.
There's growing demand across Asia for Australia's world class goods and services; the opportunities are there for the taking and, if seized upon, will help create jobs, build our economy and lead to greater prosperity for everyone.
Detailed information on each agreement can be found at the Department of Foreign Affairs and Trade and Austrade websites, or www.openforbusiness.gov.au.
30 December, 2015
Tasmanian exporters will experience the benefits of the Australian Government's extension of the Tasmanian Freight Equalisation Scheme (TFES) when it takes effect on 1 January 2016.
Senator Richard Colbeck said the Government's enhancement of the scheme will level the playing field and allow more Tasmanian businesses to participate in high value global markets.
"Earlier this year the Australian Government announced a fresh injection of $203 million to extend the TFES to include shipments of goods via the mainland to markets not currently covered by the Scheme," Senator Colbeck said.
"This is a transformative change for the Tasmanian economy. It will boost the competitiveness of Tasmanian businesses and provide a substantial incentive for local businesses to sell their products to broader markets.
"This is a great start to the New Year for Tasmanian businesses and will ensure they can transport their product across Bass Strait in the most cost effective way.
"With the great success of the Australian Government in achieving access to export markets through three free trade agreements, it is important that Tasmania is also able to share in the benefits and affordable freight costs are an important part of that.
"From 1 January 2016, Tasmanian companies shipping their goods via the mainland will be able to claim $700 per 20ft shipping container.
"Shippers from King Island and the Furneaux Group of islands in Bass Strait will be eligible for an additional 15 per cent loading in recognition of their greater shipping freight cost disadvantage.
"The state's mining, agriculture, manufacturing and smelting industries have said the expansion of the TFES will drive exports.
"Local agriculture representatives have said the expansion will bring export opportunities, production growth and jobs growth to Tasmania.
"We promised at the last federal election that we would enhance the scheme and we have delivered."
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