Representatives from the National Famers’ Federation (NFF), the Cattle Council of Australia, the Australian Meat Industry Council, the Australian Lot Feeders’ Association and AgForce – which represents cattle farmers in Queensland – are currently in Seoul to meet with Korean officials in a bid to agree an urgent approach to restarting negotiations.
The groups have warned that unless an FTA is agreed urgently, Australian exporters could lose out to competitors in the US, which already has an FTA with Korea. “We are effectively handing over more and more of our hard-earned market share each year to farmers in the USA and other regions,” said NFF president Jock Laurie.
Laurie pointed out that Australia’s AU$645m annual beef trade with Korea is currently subject to a 40% tariff. In contrast, US beef is only subject to a 34.6% tariff. “And this tariff differential is set to widen year by year until 2026, when US beef exports to Korea will be completely tariff-free,” he added.
Losing trade
Modelling by the Centre for International Economics had indicated that, by the time US beef imports to Korea become tariff-free in 2026, Australia will be losing some AU$182m per annum in lost sales, amounting to AU$1.4bn over the whole period.
“If this is allowed to go on unchallenged over the long term, we could lose the majority of the trade we currently have with Korea,” said Laurie.
AgForce Cattle president Howard Smith said that improving market access through FTAs was a “tangible outcome” that the government could deliver to improve profitability in the beef sector, adding: “We expect the Federal Government and Opposition to pursue prompt delivery of FTAs at all costs.”
Smith pointed out that as Australia’s largest beef producing state, with around 45% of the country’s cattle herd, Queensland had the most to lose from the FTA failure.
“It is imperative the issue of the Korean FTA be resolved as quickly as possible for the ongoing profitability and security of Queensland beef producers,” he said.