JAKARTA, KOMPAS.com – The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) went into effect on July 5 and both countries are getting ready to enjoy the benefits of the new deal.
With the IA-CEPA in place, Australia can export 575,000 livestock to Indonesia duty-free.
According to the Country Manager of Meat and Livestock Australia for Indonesia, Valenska, the IA-CEPA provides better assurance to the beef and livestock industries in both countries.
The organization has suggested that industry players take advantage of the AI-CEPA’s agreement for the exports of beef and livestock.
“Through the IA-CEPA, some uncertainties have been alleviated. An example is a guaranteed quota of 575,000 livestock,” said Valenska.
As stipulated in the IA-CEPA, Indonesia imposes a 5 percent tariff on livestock from Australia.
A 5 percent tariff also applies to beef imports although it will be reduced to 2.5 percent in five years. After that period, beef imports will be exempted from any tariffs.
Valenska explained that the Indonesia-Australia economic agreement provides reassurance to cattle farmers in northern Australia.
These farmers need certainty in the regulations and tariffs of both countries.
This is namely because it requires three years to raise a cow up to a point where it will be ready for consumption.
“Before the IA-CEPA, what makes it difficult for cattle farmers is the uncertainty between both countries. It makes it difficult for them to create a long-term plan,” Valenska said.
The livestock quota may increase by 4 percent each year or reaching up to 700,00 live cows in 2026.
Benefits of Australian beef
Valenska said that Australian cows and beef have adjusted their standards to fulfill Indonesian meat requirements such as ensuring it is free from any diseases.
“Australian cows are free of foot-and-mouth disease as well as mad cow disease. Also, Australian beef is renowned for its high-quality and nutrition value.”
Australian beef has also earned Halal certification from the Indonesian Ulema Council (MUI), thus is safe to consume for the Indonesian public who are predominantly Muslim.
Australia exports approximately 75 percent of its beef production to 100 countries. It account for 2.4 percent of the global beef supply.
Indonesia is Australia’s fifth-largest market for beef imports. The other four are China, Japan, the United States, and South Korea.
On the other hand, Australia has been Indonesia’s largest beef supplier for several years based on data from Statistics Indonesia.
In 2019, Indonesia imported 122,684 tons of beef from Australia. Aside from beef, Indonesia also imports wheat, raw sugar, or sugar canes from Australia.
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