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The Hon. RICK COLLESS [9.22 p.m.]: Tonight I advise the House of the marvellous benefits that will accrue to the beef producers of Australia following the recent agreement with the United States of America that was brokered by the Federal trade Minister, the Hon. Mark Vaile. Chapters 2 and 3 of the agreement refer to the changes in tariffs with respect to trade in agriculture between Australia and the United States of America. The agreement provides for a philosophical position that neither nation will introduce or maintain any export subsidy on any agricultural commodity destined for the other nation.
Goods entering the United States of America have been assigned a staging category to establish the rate at which the relevant tariffs will be eliminated under the agreement. There are five main categories established for the elimination of United States tariffs on Australian agricultural goods. The first category confirms those goods that enjoy a pre-existing zero tariff. In the second category are those goods that will benefit from immediate tariff elimination. In the third category are those goods that will have their tariffs eliminated in equal annual instalments over four years. In the fourth category are those goods that will have their tariffs eliminated in instalments over 10 years. In the fifth and final category are those goods that will have their tariffs eliminated over 18 years.
The agreement with the United States of America provides for the elimination over time of all United States agricultural tariffs, with two notable exceptions. Firstly, the agreement does not provide for any change to the over-quota tariffs on dairy products subject to tariff rate quota. It will, however, provide for a significant increase in the volumes of duty-free quota for those products and for the elimination of existing in-quota tariffs. The second issue of course is sugar. The agreement does not provide for any change in tariffs on sugar or sugar products. The sugar industry has a problem that goes well beyond the relationship between Australia and the United States of America. I give an example. In Florida, two brothers who run a sugar business are paid $US130 million in United States subsidies alone due to inefficiencies in that country's sugar industry. That is why Australia was unable to make any headway in negotiations regarding the sugar industry.
In the time remaining to me I want to focus on the beef industry. The in-quota tariffs on beef exports of US4.4¢ a kilogram will be removed immediately. That US4.4¢ per kilo, on Australia's current quota of 378,214 tonnes of boxed beef, is worth $A22.16 million to Australian beef producers. That is a huge amount of money going into the Australian beef industry, and it is calculated on the Australian dollar being valued at 75¢. That is the equivalent of $30 a head for every animal that is sold to the United States of America. That is, Australian producers will get an extra $30 a head—a lot of money in real terms. Beef exports to the United States in excess of quota currently incur a tariff of 26.4 per cent.
There are two other major benefits to the beef industry in Australia from this agreement. Firstly, the duty free quota increases by about 4,000 tonnes of boxed beef per year, to 448,214 tonnes by year 19. The first 25,000 tonnes of that 70,000 tonne increase will be achieved during the first five years. This extra quota is for boxed bulk beef excluding carcass beef and processed beef for particular uses by the retail consumer. After the eighteenth year there is no limit to the amount of Australian beef that can go into the United States of America, subject to a price-based safeguard that applies only to beef in excess of the 448,214 tonnes, plus a 420 tonnes increase per year after year18. The second major benefit is the removal of the 26.4 per cent tariff on over-quota beef, starting in year nine and decreasing to zero by year18. This will have the effect of completely removing all quotas and all tariffs on future exports of beef to the United States of America.
This is an excellent result for the beef producers and processors of Australia because it removes all current restrictions on beef exports into the United States, and the amount of beef exempt from the safeguard provisions increases by 420 tonnes per year. It will underpin the future development and security of the Australian beef industry. The Federal Minister for Trade is to be congratulated on negotiating such a good deal.