Live Export

Live exporters concerned by lack of progress on 5pc import tariff

James Nason, 08/08/2012

Australian livestock export industry leaders remain concerned about the lack of progress in Australia’s discussions with Indonesia over its recent decision to impose a five percent tariff on cattle imports.

Live exporters say the tariff represents a significant cost to the industry and is not consistent with Indonesia’s trade obligations under the ASEAN-Australia-New Zealand Free Trade Agreement.

In late May Indonesian importers learned that the Indonesian customs ministry was planning to introduce a 5pc tariff on imported cattle.

They were also informed the tariff would be retrospective, meaning they could be required to back-pay 5pc of the value of every animal they had imported since January 1, 2012.

At the time the news was considered by a special meeting of Indonesia’s importers and then dismissed as a mis-interpretation of Government policy.

However, six weeks later, their earlier fears were confirmed when they began receiving bills backdated to April. For some importers, the charges amounted to sums of more than $1 million each.

Australia’s Department of Foreign Affairs and Trade has been involved in official discussions with Indonesia’s ministries of agriculture and customs to seek a resolution to the issue.

A spokesman for trade minister Craig Emerson told Beef Central last week that Indonesian authorities had indicated the tariff change related to a definitional issue arising from the routine updating of tariff schedules earlier this year.

Australian Livestock Export Council chief executive Alison Penfold said yesterday that despite the official discussions, it appeared that little headway was being made.

“Certainly our DFAT officials have been active in raising the issue with Indonesia, but there is still no breakthrough sadly,” Ms Penfold said.

The tariff represented a significant and unfair cost to Australia’s live export cattle trade, she said.

“Exporters are starting to feel the pain and those costs will be accentuated back through the chain.

“It is having an impact on the industry and unfairly so, given that the tariff rate that is being charged is not consistent with the ASEAN-Aust-NZ-FTA.”

The charge is being levied on all imported cattle other than “breeders or oxen”.

Ms Penfold said she understood there had been no policy decision made by the Indonesian agriculture ministry to change the definition of oxen, and understood the issue surrounded how Indonesia was interpreting the definitions contained in its recently updated tariff schedules.

“There is a resolution and that is simply that there should be a zero tariff applied to Australian animals, under the preferential tariff arrangements that are in place,” she said.
 

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