China and Australia have signed a trade deal that will cut import tariffs and reduce other restrictions on Australian exports, giving a further disadvantage to European products in the Chinese market.
China is Australia’s largest export market for food, worth around €6.2bn last year.
In 2008, New Zealand signed a free trade agreement with China and trade volumes have soared. This latest deal gives New Zealand and Australian products a significant advantage over Irish dairy, beef and sheep exports.
The Australian dairy industry will be the biggest winner. China is already Australia’s second-largest market for dairy exports with a value of €242m in 2013.
Up to now, New Zealand had a considerable advantage, but China has safeguard measures on a wide range of dairy products, including liquid milk, cheese, butter and milk powders, where it can raise the tariff back to the normal rate when New Zealand imports exceed a certain volume.
Australia is the dominant supplier of beef to China with a 57% share of the country’s imports. Under the free trade agreement, tariffs on beef imports (currently ranging from 12% to 25%) will be eliminated within nine years.
China is already Australia’s most important sheepmeat market. New Zealand has traditionally been China’s largest supplier, due to its low tariffs ranging from 2.7% to 5.1%, which will be duty-free in 2016.
This latest trade agreement highlights, once again, how Europe is being left behind in major international markets.
Ireland, with our high export dependence, is particularly badly affected.
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