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Impact of Japanese snapback in beef highlights flaw in US FTA.

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17 March 2004

Impact of Japanese snapback in beef highlights flaw in US FTA

The ongoing problems for Australian beef producers and exporters from the snapback safeguard applied by Japan to our exports highlights the flaws built into the Free Trade Agreement with the United States.

The Japanese Government imposed an additional tariff on Australian chilled beef exports last August in response to an increase in the volume of product entering that market.

But despite arguing against these arrangements in Japan the Australian Government has happily signed up to similar safeguard measures with the United States.

As Mr Zoellick told Congress last week:

“In beef we had a very long phase out with various safeguards [and] slow quota increase.”

Those safeguards include an additional duty in years 9 to 18 of the Agreement if the volume of imports exceeds 110 percent of Australia’s FTA Tariff Rate Quota.

And after year 19 a snapback duty will applied to Australian imports if US beef domestic prices drop by 6.5 percent.

While the Japanese tariff is scheduled to return to the normal rate of 38.5 percent at the end of this month there are industry fears that the tariff will be triggered again as a result of volatility caused by the United States being shut out of the Japanese market as a result of BSE.

While Australia argued aggressively against the snapback arrangements in Japan the Howard Government was happy to lock Australian beef exports into similar arrangements in the United States for ever.

Contact Gavan O’Connor on 0418 518 528 Bernie Eades on 0419 664 016