Tariff cuts help boost seafood profits
Tariff cuts are making Australian seafood more attractive for consumers and importers in North Asia, with demand on the rise
By Free Trade Agreement Division, Department of Foreign Affairs and Trade
Australia’s free trade agreements (FTAs) with China, Japan and South Korea are giving Australian fisheries businesses a competitive edge in North Asia. In 2015-16, these three powerhouse economies together accounted for 53 per cent of Australia’s total goods exports. And with strong outcomes for a broad range of seafood products, there are significant opportunities for the Australian seafood sector to make further headway into these promising markets.
The tariff reductions under each agreement vary, so producers need to ensure they understand the outcomes for their specific products into each market. Traders also need to be aware they must obtain FTA-specific certificates or declarations of origin for shipments to have the preferential FTA tariff apply. And those tariff-cutting benefits are worth pursuing (see Table 1).
For example, under the China–Australia Free Trade Agreement (ChAFTA), China has started progressively removing tariffs on all Australian seafood exports, to reach zero by 1 January 2019. Many tariffs on Australian seafood exports into Japan have already been eliminated, and the progressive elimination of the tariff on Southern Bluefin Tuna began on 1 April this year.
Queensland company Aussie Red Crab supplies sustainably caught wild Spanner Crabs, with exports making up around 30 per cent of sales. With reduced tariffs under the FTAs, in 2015-16 it sold Spanner Crabs worth $320,000 to China and $240,000 to Japan.
The business is now planning to add to its domestic fisheries quota to meet increasing overseas demand, particularly from China. Jason Simpson, co-owner of Aussie Red Crab, says profit margins increased in the 2015-16 financial year, which he attributes to ChAFTA.
Looking more broadly, trade data to these three North Asian markets show good growth for the first half of 2016 for Australian live, fresh and chilled crab exports, compared with the corresponding period last year.
It is not just seafood producers that benefit; the supply chain also wins. South Australian company SEAPA designs, manufactures, markets and supplies injection-moulded oyster baskets and aquaculture equipment for worldwide distribution. Under the Japan–Australia Economic Partnership Agreement (JAEPA), the 3.2 per cent tariff on its products has been eliminated, giving the company a competitive boost in a market where it is building a strong reputation as an expert in oyster farming technology.
Tariffs on SEAPA’s products into Korea and China have also already been eliminated, giving it a further edge over competitors. Alex Jack, from SEAPA, says the North Asia FTAs are positive. “We can look at our pricing strategies and maybe have a look at how we can market more into those countries … with the FTAs under our belt, it’s definitely going to help us.”
FTA Hotline, 02 6261 1888
Austrade, 132 846
Efic (Australian Government export credit agency), 1800 093 724