Australia will change a system of company quotas on beef exports to the US to a “first come, first served” basis, Agriculture Minister Peter McGauran announced.
Under the system to come into force Jan. 1, access to the US tariff-free quota will be available to all licensed meat exporters with certification issued for each consignment, he said.
A safeguard mechanism will come into play only if exports exceed 85% of the tariff-free quota amount by Oct. 1 each year, he said.
The safeguard will be a tradable proportional allocation of 15% of the tariff-free quota, based on shipments by exporters to the US over the previous two years, he said.
Where the 85% quota export trigger isn’t reached, “‘the quota will continue on a first come, first served basis,” he said in a statement.
“A no-allocation first come, first served arrangement with controls will minimize the government’s intervention, quota distortions and compliance constraints inherent in the existing arrangements” while providing opportunities for new entrants and businesses to expand, he said.
McGauran announced the decision following a report by a panel set up earlier this year to review the quota arrangement, which first took effect in 2003.
The original arrangement was introduced to apportion quota when the 378,214 metric tons tariff-free quota looked like it would be exceeded.
The quota is set to rise 20,000 tons in 2007, with an additional 5,000 tons added every two years thereafter, under a free trade agreement between the two nations.
“Forecasts suggest that Australia is unlikely to reach its quota limit for beef exports to the US this year, and possibly until after 2008,” McGauran said.
Exports to the US in the first seven months of this year totaled 198,182 metric tons, up 5.9% from the year-earlier period, according to official figures.
After Brazil, Australia is the biggest global exporter of beef, with the US one of the two big export markets.
Australia’s beef exports in 2004 were valued at A$4.6 billion, making the beef cattle industry a cornerstone of the country’s agriculture. (Dow Jones & Company, Inc.)