Indonesia trade deal
BEEF, dairy and horticultural exporters can look forward to significant tariff relief in coming years, following the signing of a trade agreement with Indonesia, one of Australia’s most valuable destinations for agricultural produce.
Close to a decade in the making, the deal was finally signed in Indonesia today but will now need ratification by parliaments in Australia and Indonesia, where elections in both countries are imminent, before coming into effect.
With a population of more than 260 million right on Australia’s doorstep, Indonesia has long been a prized market.
In 2017 almost 50 per cent of Australian food and fibre, worth $3.5 billion, was exported to Indonesia.
Once implemented, more than 99 per cent of Australia’s exports will enter Indonesia either duty free or under improved and preferential arrangements.
Highlights for agriculture include annual duty-free access for Australian grain growers for 500,000 tonnes of feed grains (wheat, barley and sorghum), growing 5 per cent each year.
Live cattle will be duty free for 575,000 head, increasing by 4 per cent per year to 700,000 head. The tariff on frozen beef and sheep meat will halve immediately from 5 to 2.5 per cent and be eliminated across five years
Horticultural access will improve, with tariff reductions worth an extra $5-$10 million to Australia’s fresh vegetable exports per annum, according to the National Farmers’ Federation.
In particular, tariffs on carrots – Australia’s largest vegetable export – will be cut to 10 per cent (down from 25 per cent) for 5000 tonnes per year, increasing to 10,000 tonnes after 10 years, and eliminated after 15 years.
Some dairy and honey products will also have tariff reductions.
Minister for Trade Simon Birmingham said the deal marked “a new chapter in Australia’s partnership with one of our closest friends and neighbours”.
“Indonesia offers significant economic opportunities right on our doorstep,” he said.
“Our neighbour has one of the fastest-growing economies in the world, averaging 5 per cent growth over the past two decades.
“Most predictions have Indonesia on track to be the world’s fifth-largest economy by 2030.
“Our agreement helps build economic prosperity for both our nations.”
NFF chief executive Tony Mahar, who accompanied Senator Birmingham to Indonesia for the signing, said the deal meant “tangible benefits to the hip pocket of many Australian farmers”.