What is available in which agreements. Some of the highlights of trade free agreements presently in force.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”)

• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”),5 in force for Australia since late last 2018, is beneficial to agriculture, given its liberalising effect across markets that are the destination for 23% of Australian agriculture exports. 

In Japan, this saw the abolition of tariffs on Australian sheep meat, wine, cheese, horticulture, cotton, wool and seafood. Beef exporters are set to benefit, even if slowly. For example, in Japan tariffs will be falling to 9% over 15 years (well below the 19.5% and 23.5% tariffs under the pre-existing 2015 Japan-Australia Economic Partnership Agreement (“JAEPA”), for frozen and fresh respectively). Dairy also will see improvements in Japan, with tariff removal or new quotas on a range of cheeses, milk powder and protein products. However, the moderating factor is that other signatories will receive the same reduced tariffs, losing the tariff advantage that Australian beef exporters currently enjoy. 
 

The China Australia Free Trade Agreement (“CHAFTA”)

• The China Australia Free Trade Agreement (“CHAFTA”), in force from late 2015, did not arrive at tariff reductions even-handedly across all agricultural sectors. The sugar, rice and cotton industries, and some grains (wheat, canola, maize), achieved almost no improvements in their ability to increase the volumes of their sales to China, whereas the results for dairy products, beef, lamb and horticultural products were excellent. Some volume-limiting special safeguard measures apply to beef and to milk powders. Other winners were barley and sorghum, although barley growers probably do not think that they are “winners” at the present time. 
   

Japan-Australia Economic Partnership Agreement (“JAEPA”),

• Winners under the Japan-Australia Economic Partnership Agreement (“JAEPA”), in force early 2015, were beef (in the form of front-loaded reductions over 18 years), pork (in the form of increased Australia-only quota), and horticulture. Tariffs were removed for barley and wheat (but for feed purposes) and for wheat gluten and major vegetable oils. Bulk wine and beer fared well too. The dairy sector was a loser, noting that Japan’s dairy markets have traditionally been closed to imports. Sugar continued to be discriminated against by reason of the Japanese system of allowing low grade sugar in tariff free, but not high-grade sugar. 
   

Korea-Australia Free Trade Agreement (“KAFTA”),

• Under the Korea-Australia Free Trade Agreement (“KAFTA”), in force 12 December 2014, significant market opening was negotiated with respect to beef, wheat, sugar, dairy, wine and some horticultural products. Wheat, cotton, wool and sugar were already subject to only low or no tariffs. Cheese tariff quotas and quotas are subject to an unusual 20-year phase-in. Reductions, from high rates, for table grapes, nuts and cherries, even if not to zero, were still very substantial. Left out was rice, ginseng, honey, milk powders, streaky pork and selected horticultural products. 

The Malaysia-Australia Free Trade Agreement (“MAFTA”),

• The Malaysia-Australia Free Trade Agreement (“MAFTA”), in force early 2013, delivered a fairly comprehensive result for agriculture, albeit with some short delays for some sectors. MAFTA requires annual increases in quota volumes for liquid milk; commences tariff reductions for rice in 2023 dropping to zero by 2026; and eliminated remaining tariffs on horticultural products in 2016. 

The Australia-US Free Trade Agreement (“AUSFTA”)

• The Australia-US Free Trade Agreement (“AUSFTA”), in force as long ago as 2005, has its critics, because it failed to overcome US sugar restrictions and made only small and graduating changes for exports of beef and dairy products. 

The Thailand-Australia Free Trade Agreement (“TAFTA”),

• The Thailand-Australia Free Trade Agreement (“TAFTA”), also effective from 2005, was more of an overall success for agriculture, noting that reductions to zero were postponed for beef and pork; butter and cheese; and sugar. However, all tariffs will be removed from these products next year (2020). For other dairy products (milk, skim milk powder and cream), all tariffs and quotas will be eliminated in 2025. 

Second, with respect to free trade agreements (“FTAs”) concluded but not yet in force, these are the key features for agriculture: 

The Australia-Hong Kong Free Trade Agreement (“AHKFTA”),

• The Australia-Hong Kong Free Trade Agreement (“AHKFTA”), signed only a few months ago but not yet in force, will lock in zero tariffs on all Australian exports to Hong Kong, subject to the ability retained by Hong Kong to increase tariffs up to its bound levels under WTO rules. This will particularly benefit Australian seafood, beef, pork and winemakers. The Australia-Hong Kong agriculture, fisheries and forestry trade relationship was worth AUD1.4 billion to Australia in 2017-18. 

The Indonesia-Australia Comprehensive Economic Partnership Agreement (“IA-CEPA”)

• The Indonesia-Australia Comprehensive Economic Partnership Agreement (“IA-CEPA”), concluded a few months ago, is set to benefit a wide range of agribusinesses. Grain farmers will get guaranteed duty-free access for 500,000 tonnes of wheat, barley and sorghum grains per year increasing at 5% per year to 775,664 tonnes. Duty-free access for live male cattle will be increased 4% a year to 700,000 head annually. All tariffs on beef and sheep meat will be removed over the next five years. Tariff reductions will also occur for dairy, mandarin, potato and carrot exporters. 

The Peru-Australia Free Trade Agreement (“PAFTA”)

• The Peru-Australia Free Trade Agreement (“PAFTA”), concluded in February 2018, will remove 99.4% of the agricultural product tariffs affecting Australian farmers in their export trade with Peru. Given Peru is one of the most active FTA authors in the world, these tariffs have effectively shut Australian exporters out of that market. Duty-free access will be increased for sugar (90,000 tonnes in 18 years), dairy (10,000 tonnes in five years), rice (14,000 tonnes in five years) and sorghum (20,000 tonnes in five years). And, importantly, the “price band”: system for these goods will no longer apply against Australian exports. Beef tariffs will be eliminated within five years, while tariffs for sheep meat, seafood, almonds and wheat will be removed immediately. 
  
  
  In summarising the above, it is the recent FTAs - the IA-CEPTA, PAFTA and especially the CPTPP - that have significantly liberalized agricultural trade for Australian exporters. 

Author: Daniel Moulis | Moulis Legal
Presented: The 4th Annual Agribusiness Law Conference 2019