South-west dairy hopes soar after new trade deal with China

Kangertong dairy owner Lisa Dwyer says the trade agreement could be a game changer, 141117DW05 Picture: DAMIAN WHITE
Kangertong dairy owner Lisa Dwyer says the trade agreement could be a game changer, 141117DW05 Picture: DAMIAN WHITE

SOUTH-west primary industries stand to gain tens of millions of dollars in exports and strong jobs growth from the Free Trade Agreement (FTA) between Australia and China that was finalised yesterday, Member for Wannon Dan Tehan says.

Mr Tehan said the south-west dairy industry would be a big winner from the FTA but it was also expected to deliver big windfalls to the region’s beef, sheepmeat, wool and wine industries.

WestVic Dairy chairwoman Lisa Dwyer said the FTA could be a “game changer” for the south-west dairy industry

Mrs Dwyer said the FTA would inject new confidence into the region, which produced 23 per cent of the nation’s milk.

She expected the south-west’s exports of infant formula to China would be one of several high value dairy products to increase through the FTA.

Mr Tehan said he expected the FTA would stimulate jobs growth, particularly in the south-west dairy and meat processing industries.

He said 93 per cent of Australia’s exports to China would be tariff free within four years.

Highlights of the FTA include:

. the abolition of the 15 per cent tariff on infant formula within four years;

. tariffs of 12-25 per cent on beef reduced to zero in nine years;

. tariffs on sheep meat reduced to zero in eight years; 

. a duty-free quota of 30,000 tonnes of clean wool; and

. tariffs on Australian wine of 14-20 per cent reduced to zero in four years.

Mr Tehan said the FTA would grant Chinese workers two-year working holiday visas to be employed  in agriculture and tourism but they would have to receive Australian wages and conditions. 

Australian Dairy Industry Council (ADIC) chairman Noel Campbell said China was the biggest dairy market on the planet and the Australian dairy industry was thrilled about the FTA.

“The FTA will strengthen Australian dairy’s competitiveness by providing our industry with a significant advantage compared to other countries in the market that do not have an FTA with China,” Mr Campbell said. 

“It also puts the industry on a more level playing field against key competitors in the Chinese market, such as New Zealand.” 

Fonterra Australia managing director Judith Swales said the FTA made it “a good time to be in dairy”.

“For our Australian farmers, it will give them the confidence to invest in their businesses and confidence that the whole industry is supporting them in providing access to our biggest export market,” Ms Swales said.

She said Fonterra was “well placed” to increase high-value speciality exports to China and benefit from the FTA.

Fonterra already has a strong presence on the ground in China with farming hubs, long-standing customer relationships and successful brands, food service and ingredients businesses, Ms Swales said. 

“To be globally relevant, we have to succeed in China,” she said.

“It remains our key market and central to our strategy.” 

Murray Goulburn (MG) said the FTA gave it more confidence for its $19 million project to increase the capacity of its Koroit facility to produce nutritional products for Asian markets including infant formulas.

Work has already commenced on the project that is expected to be fully operational by May 2015.

MG managing director Gary Helou said the agreement seemed to tick all the boxes sought in a good FTA.


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