National Farmers' Federation

ASEAN deal prevents backsliding & sets tariffs on zero track

STRIKING a new trade deal with the Association of South East Asian Nations (ASEAN) overnight, Australia has locked in low tariffs in the face of mounting global economic turmoil – effectively preventing ASEAN from sliding into protectionism – while, over time, reducing many tariff levels to zero.
“Pragmatically, it’s not a bad result at all,” National Farmers’ Federation (NFF) President David Crombie said. “With many economies around the world having the jitters, the temptation for them to pull down the shutters on their markets is very real.
“Under international trading rules, some ASEAN countries could set tariffs for Australian imports over 200%. This new deal, in some markets locking them in 5% or less when the deal comes into force, kills that option. This will boost the confidence of exporters about the ASEAN market’s longer term opportunities.
“ASEAN accounts for 15% of Australia’s total agricultural trade – including 84% of our wheat flour exports, 70% of live cattle exports, 34% of dairy exports, and 31% of sugar exports. With growth across ASEAN economies averaging over 5%, and a population explosion across the region, its importance to Australia’s agricultural exports is bound to expand.
“Looking further ahead, many tariffs are put on a sliding scale under the new agreement – meaning they are eliminated over varying timeframes. Ultimately, that’s good news for Australia’s vital agricultural exports, which are becoming increasingly important as the minerals boom winds down and agriculture is positioned to take up the slack.
“Despite the gains, there is still more to be done. Barriers still exist in ASEAN for several of our commodities, in countries like Indonesia, and exclusions will disappoint some industries. Further, often it’s not just tariffs that restrict trade but technical issues or so called ‘behind the border’ restrictions.
“Given this, the Australia-Indonesia Free Trade Agreement feasibility study, currently underway, will now come under the spotlight.
“Strategically, our Government must seek to maintain and build on the momentum created from these ASEAN gains, taking it into Japan, China and South Korean markets.
“The Asia Pacific has an opportunity to show other countries how keeping markets open maintains economic growth and assists nations to wade through the murky financial crisis. The European Union could take a leaf from the Asia-Pacific book… the US would do well to buy a copy, too.
“Australian farmers are in a prime position – geographically and in terms of our safe, high quality production – to fill the order for consumers across Asia and beyond.”

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