Aussie beef loses advantage in Korea
Until 31 December, Australian beef imports in Korea will have a higher tariff due to the full utilization of the annual safeguard volume in this market. This is a unique situation since KAFTA entered into force in 2014 and is going to give an advantage to the US, the main competitor for Australian beef in the South Korean market. "The safeguard volume for 2019 is 170,673 tonnes swt and increases by 2% each year. Australia has triggered the safeguard, resulting in Korea raising the tariff for Australian products from 24% to 30% – effective until 31 December 2019," informs Meat and Livestock Australia in a press release.
The US is Australia’s major competitor in the Korean imported beef market. The US tariff will remain at 18.7% due to a greater safeguard volume (312,000 tonnes swt) under the Korea-US Free Trade Agreement (KORUS).
Once Australia has triggered the safeguard volume, the tariff differential between Australia and the US will increase from 5.3% to 11.3%. "In the short-term, the impact will be negligible, given the modest tariff increase in 2019. Although tight domestic cattle supplies may limit Australia’s ability to serve the market in 2020, it is possible that Australia will trigger the safeguard again, as the remainder of Australian exports in 2019 will carry over and count towards the 2020 safeguard", commented the Association.
Other contributing factors to future demand include prices from both Australia and the US, exchange rates and the ongoing African Swine Fever outbreak Asia.
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