Aussie meat exporters to benefit from FTA with Indonesia
The Australian meat industry will soon start reaping the benefits of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), as the Indonesian authorities have announced the ratification of the trade agreement between the two countries.
"Fabulous news that the IA-CEPA has been ratified. Our relationship with Indonesia has never been more important as we look to recover from CV-19. In 2019, the meat and livestock trade with Indonesia worth over $1bln. Also, 6 in 10 Aussie red meat jobs rely on trade", commented an official from the Australian Red Meat Council.
"After discussions earlier this week with my Indonesian counterpart, Minister of Trade, Agus Suparmanto, we welcome this step that will see the benefits of this trade agreement flow from 5 July this year. This is the most comprehensive trade agreement Indonesia has ever signed and will give a competitive edge to Australian exporters. The economic stresses being caused by COVID-19 both in Australia and Indonesia make this agreement even more important, as it will provide an opportunity to better stimulate growth and investment across both nations during the recovery phase," commented Simon Birmingham, Australia's Minister of Trade, Tourism and Investment. IA-CEPA will officially enter in force on 5 July, meaning that 99% of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements.
Indonesia is Australia's largest cattle export market but the COVID-19 pandemic has slowed the shipments in the last couple of months. "March live cattle exports to Indonesia were just 34,000 head, back 16% on last month and down 41% on March last year. A combination of high Australian cattle prices earlier in the year and a weak Indonesian exchange rate against the USD have contributed to the decline. Additionally, feeder cattle demand from Indonesian feedlots is sluggish, attributed to a COVID-19 slowdown in abattoir activity – slaughter is running 30-50% below typical levels – and an uncertain consumer outlook", reported Meat and Livestock Australia. Currently, Australian cattle exporters are facing strong competition from India, while beef exporters have witnessed Brazilian products making their way into this market in the last few months.
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