Grain benefits in China FTA
GroundCover™ Issue: 115
Barley and sorghum are the main grains-industry beneficiaries of the new China–Australia Free Trade Agreement announced in November 2014. The three per cent tariff on barley and two per cent tariff on sorghum were immediately removed.
GrainGrowers says exports of these grains to China are growing on the back of an expanding Chinese alcoholic-beverage sector. In 2013, exports were valued at $351 million and $91 million respectively for these crops.
The value of tariff removal represents about $12 million a year in 2013 trade terms, with the benefit being shared between Chinese consumers and the Australian grains industry. With trade in these commodities expected to continue to grow over time, these annual benefits will also increase.
Australian wheat exports to China will remain subject to an out-of-quota tariff of 65 per cent, and within-quota tariff of one per cent.
However, China’s current annual wheat quota of 9.6 million tonnes is well above the amount it currently imports. Canola exports to China will continue to be subject to a nine per cent tariff.
Other positives for grains from the agreement include:
- immediate removal of the two per cent tariff on Australian oats;
- removal of tariffs on pulses either immediately or within four years;
- immediate removal of the tariffs on a range of specialty grains such as millet, quinoa and triticale; and
- removal of tariffs on some processed grain products such as rolled and flaked oats and barley immediately, and on wheat gluten and starches over four years.
Region National, Overseas