China FTA good news for pome fruit growers

Update as at 18 June 2015

The China-Australia Free Trade Agreement (ChAFTA) was signed on the 17 June 2015 locking in the trade agreements previously outlined below that will benefit Tasmanian apple growers with reduced tariffs over time. APAL welcomes the agreement but there is still no access for mainland Australian apple growers to sell their fruit into China.

Original article posted on 28 November 2014

Apple orchard in Tasmania

Apple growers in Tasmania are set to benefit first from the lifting of tariffs on apples exported to China.

The China-Australia Free Trade Agreement (ChAFTA) will see the tariff on Australian apples decrease from 10 per cent to zero over four years.

The summary of the anticipated tariff schedule for horticultural products that is expected to be included in the FTA states that there will be an “elimination of the 10 to 30 per cent tariff on all other fruit [including apples and pears] within 4 years”.

“We commend the government on the pending China FTA that will put Australian apples on par with our strongest competitors, Chile and New Zealand, both of whom secured FTAs with China some years ago,” says APAL’s Industry Services Manager Annie Farrow, who also represents the industry on the Office of Horticultural Market Access.

“Australian apples are automatically 10 per cent more expensive than apples from Chile or New Zealand. This just adds to the burden because we are already a high cost producer because we pay much higher wage rates than in competing nations.”

The FTA Declaration of Intent was signed during the visit of Chinese President Xi Jinping to Australia on 17 Nov 2014. Now the legal texts, translation and domestic treaty approval processes will take place with the FTA expected to be signed in 2015 when the first reduction of 2.5 percentage points will occur.

Australia sent its first air and sea shipments of Tasmanian apples to mainland China this year, totaling 24 tonnes. Only apples from Tasmania can be exported to China because it is the only state that retains a fruit fly free status.

“While the FTA is a terrific achievement, APAL continues to work hard to secure access for mainland apples into China,” says Annie. “Currently mainland apples are prohibited because we have not yet obtained a protocol for that trade.”

In 2010, Chinese and Australian officials agreed to work on progressing horticulture trade access on a 4 x 4 commodity basis – whereby a queue of four commodities would be prioritised for trade access from each country.

For Australian exports the queue comprised: table grapes (signed 2010); cherries (signed 2012); stone fruit (not yet signed, but a protocol for nectarines may be announced in December 2014); and lastly, mainland apples. For China the export queue commenced with apples (signed 2010) and table grapes, which is nearing completion. China has yet to identify the commodities to follow.

“After stone fruit, Australian mainland apples are next in the queue,” says Annie. “Chinese officials will want to undertake a pest risk analysis and assess how mainland growers manage pests and diseases of concern to them. They will then determine a phytosanitary protocol which will include measures around the treatment of fruit fly.

“We are urging the government to speed up the negotiation process because we first sought access in 2006 (at the same time as stone fruit) and 8 years later we have not progressed.”

The FTA also applies to pears. However, APAL has not yet lodged an application for pear exports into China.

“APAL would need to assess whether Australia could supply sufficient volumes of a pear variety that matches what the Chinese pear market seeks, and whether we could be competitive with other suppliers,” says Annie.

By |June 17th, 2015|Market access, News|

About the Author:

APAL is an industry representative body and not-for-profit membership organisation that supports Australia’s commercial apple and pear growers.