Under the China Australia Free Trade Agreement (CHAFTA) preferential tariffs are withdrawn once a Special Agricultural Safeguard (SSG) is triggered. This year, the safeguard was set to 179,687 tonnes of beef, a volume that is said to have been met on June 30. Reportedly, despite Australia triggering the safeguard for the past two years, a spokeswoman from the Department of Agriculture said that June was the earliest that preferential tariffs have been dropped since CHAFTA was established in 2015. “The unprecedented growth of Australian beef meat exports to China in the year to date means that the volume has reached the threshold already this year”, she said.

The impact of the new tariff is expected to be felt across the whole Australian beef industry. While New Zealand and Costa Rica are now on zero tariffs for beef imported into China, Brazil, Argentina, Uruguay and Canada are reported to already be on 12%. The preferential tariffs are to be reinstated from January 1, 2021 before being completely removed under CHAFTA from January 1, 2024. According to Australia’s Department of Agriculture, the change in tariffs is “not related in any way to other trade issues or Covid-19”. The denial comes after China imposed an 80% tariff on Australian barley amid accusations farmers were selling the product for cheaper than it costs to produce. Such a practice makes it harder for Chinese barley producers to compete, but Australia has denied the claim that its farmers were ‘dumping’ barley.

Sources: ABC/The Market Herald