AUSTRALIA has signed off on a historic and comprehensive deal with Indonesia, which both countries have agreed to implement within the next 100 days.
Australia already exports about $2.8 billion worth of agricultural goods to Indonesia and the new agreement should see that increase by leaps and bounds.
Once the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) is implement, 99 per cent of the nation's agricultural goods will get preferential access into Indonesia.
That's good news for farmers everywhere - Indonesia is the world's fourth largest country by population and is expected to be a trillion-dollar economy by 2050.
Here's what the deal means for your farm.
Live cattle is Indonesia's third largest goods import from Australia. IACEPA market access outcomes benefit both countries and support Indonesia's efforts to add value to its own beef production:
- Elimination the five per cent tariff and guaranteed access for 575,000 live male feeder cattle into Indonesia each year, rising to 700,000 in year six of the agreement
- A review in year six of the agreement to consider subsequent increases
- Elimination of the five per cent tariff on live breeder (female cattle), with unlimited tariff-free access guaranteed
Indonesia will eliminate its tariff on frozen beef:
- Tariff on frozen beef cuts with bone in reduced to 2.5 per cent and eliminated by 2023
- Tariffs on all other frozen beef eliminated by 2020
Sheep and goat meat
Indonesia will eliminate its tariff on sheep and goat meat:
- Tariff on frozen sheep meat reduced to 2.5 per cent and eliminated by 2023
- Tariff on fresh, chilled or frozen goat meat reduced to 2.5 per and eliminated by 2023
Indonesia will eliminate tariffs on dairy products not eliminated under ASEAN-Australia-New Zealand FTA (AANZFTA):
- Elimination of concentrated or sweetened milk and cream
- Elimination for grated or powdered cheese
- Elimination in 2033 of tariffs on liquid milk and cream (not concentrated or containing added sugar or other sweetening matter)
- Elimination in 2026 of tariffs on milk and cream (not concentrated nor containing added sugar or other sweetening matter), other than in liquid form
IA-CEPA outcomes for vegetables include:
- 25 per cent tariff on potatoes (excluding granola, median, nadia and blis) cut immediately to ten per cent for 10,000 tonnes per year, then further reduced after five years to five per cent for 12,500 tonnes per year, increasing by 2.5 per cent per year
- 25 per cent tariff on carrots cut immediately to ten per cent for 5000 tonnes per year, with progressive tariff reductions down to zero per cent for all carrots after 15 years
- Elimination of tariffs from implementation or by 2026 for most other vegetables
Fruit and nuts
Indonesia will eliminate tariffs on citrus under tariff rate quotas:
- 25 per cent tariff on Australian mandarins cut immediately to ten per cent for 7500 tonnes per year, with progressive tariff reductions down to zero per cent for all Australian mandarins after 20 years
- Guaranteed tariff-free access for 10,000 tonnes of oranges, increasing by five per cent each year
- Guaranteed tariff-free access for 5000 tonnes of lemons and limes, increasing by 2.5 per cent each year
Indonesia will reduce or eliminate tariffs for other fruit and nuts:
- Elimination of tariffs on pineapples, avocados and strawberries in 2026
- 20 per cent tariff on mangoes reduced to 12.5 per cent in 2025
- Five per cent tariff on dragon fruit reduced to two per cent in 2026
- Elimination of all other tariffs including on bananas, persimmons, and a range of tropical fruit which were not eliminated under AANZFTA.
Cereals, grains and products of milling industry
Indonesia will guarantee access for feed grains to complement the strong trade in grains for human consumption:
- Guaranteed access into the Indonesian market for 500,000 tonnes of feed grains (wheat, sorghum and barley) each year, increasing at five per cent per annum
- Elimination of outstanding tariffs not eliminated under AANZFTA on most remaining cereals and grains
- Elimination of the five per cent tariff on rolled oats
- Elimination of five per cent tariffs on unroasted malt
- Phased elimination of the 5 per cent tariff on honey to 2033
- As an early outcome of IACEPA in 2017, Indonesia reduced its tariff on Australian sugar from around 8.8 per cent to five per cent.