Australian primary producers, including those in the potato industry, will benefit under the Korea-Australia free-trade agreement (KAFTA) which was publicly released by the Department of Foreign Affairs and Trade (DFAT).
Korea is already Australia’s fifth largest export market for agricultural, fisheries, forestry and food products valued at $2.27 billion in 2012-13. Agricultural exports alone are expected to be 73 per cent higher by 2030 under this FTA.
Ms Robbie Davis, CEO of Potatoes South Australia Incorporated, the peak industry body for the entire value chain, said “The elimination of all tariffs across all sectors of the potato industry by 2030 is welcomed particularly as producers look to diversification through export.”
Today there have been publicised reports concerning Korea’s elimination of a 304% tariff on ‘chipping’ potatoes. “The current tariff on potatoes across all sectors is approximately 30%. Korea has set a global World Trade Organisation (WTO) quota of approximately 20,000 tonnes on all imported potatoes and only if this quota is exceeded, could a tariff of 304% be imposed. In 2012 Australia exported 11,000 tonnes worth $10million and faced the 30% tariff”, she explained.
The most significant outcome for the industry concerns the export of potatoes for processing. A seasonal and immediate tariff elimination has been negotiated for the December-April period, the nation’s peak supply time. This puts the industry on equal footing with the USA for five months annually. The current WTO quota system will be removed for potatoes for chipping for these months and they will enter duty-free.
Ms Davis said “KAFTA has not been ratified by either country yet and the zero tariff will not come into effect until much later in the year following scrutiny from the parliament and Joint Standing Committee on Treaties”.
