Senate Rural and Regional Affairs and Transport Legislation Committee, , 1:47:58 to 1:53:05
Discussion on the mechanics of the first-come, first-served beef quota in China and the potential economic displacement effects on global markets.
Topics: Beef exports, Trade policy
Speakers: Speaker 22, Speaker 5, Speaker 14, Interjection
tariff >> Senator China has indicated that it's a first come first served
>> right quote. Okay. Okay. Um, is that going to impact some parts of the country worse than others then in terms of their market, their seasonal
production and the like or >> uh it it could have a seasonality component but it could also have a component compared with uh trade those that trade in frozen product against those that that trade in chilled product. Right. >> Uh and then the ability I guess for um those that are trading in chilled highquality um rugg is a good example um uh their ability to be price competitive if the full quadr is being used early in
the calendar year for example. >> Presume a lot of there is a seasonality from the demand side around Chinese New Year and the like. Uh do our products typically go uh to China uh in the calendar year of that new year or would they go over sort of around Christmas time December for to be ready for Chinese New Year
>> product is often staged senator so it might be held in bond uh at the end of a particular calendar year to be presented in the new >> calendar year ahead of the Chinese new
year >> and then they'd still have access to the the tariff-free environment >> they would if the product is there >> will reset every January January 1st. >> It will reset every January 1st. >> Yeah. Right. Okay. Um uh has there been any assessment done just yet on what is the impact potentially for the industry? >> Well, the impact.
>> Yeah. The economic impact >> Senator in in the context of um trade volume. >> You said that that in 2425 there was around 270,000 ton. >> Let's extrapolate that out. We know that in 25 the 25 calendar year that was probably closer to 300,000 ton. So if it's a reduction of to 205,000 ton it's a 95,000 ton reduction into that market
>> I suppose. But we'll obviously probably sell that elsewhere.
>> They'll look to sell that elsewhere. Yes.
>> So is there that's has there been any economic modeling or assessment done of what the net effect of this change might
be? So we'll be updating our forecast for the the sector and we'll have some commentary on that in the release in March this year. Um but it's as you say fair to say that you know the displacement effects into global markets will occur. I think the larger driver will be the displacement effects of the other major importers into China >> um such as Brazil and so forth. But we we're offsetting that with a fairly you know strong demand over over the I guess the whole global picture. So
>> okay. >> Um all right. Um uh yeah I might well just quickly had even before this decision had you been doing it a or anyone else been doing economic modeling on the potential for uh Chinese uh uh restrictions on agriculture and the potential impact on our economy.
>> I think we kind of continually look at I guess that global geopolitical space and the vulnerabilities and so forth across our training environment. One of the things that's key in that is is the I guess the movement and the flexibility between different markets. Um looking at past experiences with with red meat in particular, we've seen that they've been quite flexible. So in the sense that there are ability to shift to some of these dynamics is quite good and moderate some of that impact. Um and so we kind of look at that as a continual piece. There's obviously not just China. There's a range of other countries where we we eb and flow in terms of importance. >> Okay. And I can answer if you want the seasonality question. >> Okay. It looks fairly constant, but over the last calendar year or last 12 months, we've seen pretty much a steady increase over time. So there's no, you know, real seasonality exports. Um it falls in January generally because we have lower slaughter in January. >> You know, just our own production
dynamics. Okay. Um that might shift then I suppose uh with the new arrangements um I I believe some in industry are talking about maybe a voluntary system which sort of I suppose shares the burden to some extent. Is there any discussions
with industry about that? >> Senator industry have have asked some questions of um of the department uh as we are the I guess the the administrator of the existing quotas that have been negotiated. For example, under free trade agreements, so government to government agreements, they've asked some questions around um how a voluntary system might be imposed um uh including whether it's even possible under our existing legislation. So, we're working through
>> okay
>> um those questions that have been posed to provide some some um advice to industry ahead of them. Um I expect potentially forming a further position about what it is that they might or may
not want. >> Okay. Um and I might just quickly ask I believe the US has changed some of their tariffs as well. Is there now is it back to zero on Australian beef to the US at the moment?