Increased Market Access Key to Trade Deals

On November 14, 2002, the Bush Administration notified Congress of its intent to launch Free Trade Agreement negotiations with Australia. Officials expect those negotiations, which began in Australia the week of March 17, to be completed by the end of 2004.

In early February 2003, NCBA testified before the U.S. International Trade Commission. NCBA representatives pointed out that the United States is already the most open, least restricted major beef market in the world and that a free trade agreement with Australia would not benefit the U.S. cattle industry. NCBA continues to believe multi-lateral World Trade Organization  negotiations provide the best way to reduce unfair trade barriers and open markets for U.S. agricultural products. Beef markets in other developed countries remain virtually closed to U.S. beef or are protected by relatively high tariffs (Japan at 38.5 percent and Korea at 41.4 percent).

Australia filled its quota for the first time ever during the week of December 5, 2001. Product was placed in bonded storage during December 2001 and released after January 1, 2002, causing front-loading of imports from Australia during 2002. In early October 2002, the Australian government announced the implementation of a tariff rate quota (TRQ) management system that controls the amount of product that each exporter can send to the United States to manage the remaining allocated tariff rate quota. However, cattle slaughter has markedly declined in Australia due to drought-reduced supplies and Australia did not fill its tariff rate quota in 2002. Therefore, NCBA does not believe that increasing Australia’s access to the U.S. beef market is warranted.

NCBA remains resolute in its stance that any increased access to the U.S. beef market should not be granted until the U.S. achieves greater access to beef importing countries such as Japan, Korea and the European Union. This access will only be achieved through multilateral negotiations within the Doha Round and WTO. The Australian and New Zealand markets are relatively small and offer little market growth for our exports compared to the Asian and European markets. Even if outstanding sanitary and phytosanitary issues, such as the 30-day import waiting period in Australia, are resolved and the Australian market was fully open to U.S. product, the U.S. cattle industry would find little opportunity in a country with a population slightly larger than that of Florida.

An increase in the tariff rate quota allocated to Australia is a top priority for Australia’s cattle industry. Australia’s position, pre-negotiation, called for a 20 percent increase in its access to the U.S. market and a recent statement from the Cattle Council of Australia reaffirms this stance: “removal of trade barriers to Australian beef must be at the heart of the current FTA negotiations with the U.S. — there can be no FTA with the U.S. without this.”

•  NCBA does not believe, as Australia does, that a U.S.-Australian FTA would put pressure on other countries to liberalize beef trade.

•  NCBA remains very concerned that increased Australian access into the U.S. market and a collapse of the WTO negotiations would leave NCBA members and the U.S. cattle industry without much-needed access to the Asian and European markets.

•  NCBA will continue to monitor the status of the proposal for negotiations.