Dairy wins in Indonesia-Australia trade deal

milk powder stock image

All remaining tariffs on dairy exports into Indonesia will eventually be scrapped as part of a new economic partnership agreement signed by Trade Minister Simon Birmingham.

As part of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), tariffs will be removed on entry into force for skim milk powder (SMP), whole milk powder (WMP) and grated and powdered cheese, while remaining tariffs will be eliminated by 2026 for non-liquid milk and by 2033 for liquid milk.

Peak dairy industry body the Australian Dairy Industry Council (ADIC) welcomed the deal, saying it will create a closer relationship with one of Australia’s largest trading partners.

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“As Australia’s close neighbour with strong existing ties with our dairy industry, the conclusion of IA-CEPA will enhance the naturally emerging opportunities that are presenting themselves in Indonesia,” ADIC Chair Terry Richardson said.

“The Australian Government should be congratulated for achieving this positive result.”

The agreement also includes a cooperative mechanism to enable regular discussion of non-tariff measures (NTMs).

“These NTMs, including measures such as licencing arrangements and product testing regulations, can be significant hurdles for Australian dairy exports into markets like Indonesia and add significant costs to doing business,” Mr Richardson said.

Indonesia is a major destination for Australian dairy exports and ranks only behind Greater China and Japan as Australia’s third largest dairy export market on value terms. In 2017/18, Australia exported over 60,000 tonnes of dairy to that market, valued at over A$200 million.

Source: ADIC