Australian beef exports trigger Safeguard mechanism in Korea
AUSTRALIAN beef exports to South Korea have triggered the country’s annual Safeguard mechanism.
The Safeguard provision in Australia’s bilateral Free Trade Agreement with Korea is designed to protect the Korean domestic beef industry from unusual rises in volume of imported beef in any given year.
The mechanism was officially triggered on 8 December, when 2023 export volume reached 184,742 tonnes.
With only three weeks trade remaining in the 2023 year, impact on trade will be moderate – but still, all remaining Australian imports cleared by Korean Customs before 31 December will be exposed to a 30pc tariff, instead of this year’s standard 13.2pc. Australian beef product shipped prior to the date of the safeguard trigger that have not yet cleared customs will still be admitted at the 13.3pc tariff rate.
Some importers may elect to hold remaining Australian product in bonded storage for a week or two, for carry-over against the 2024 quota year, Beef Central was told.
It’s widely anticipated that the Australia’s Safeguard may be triggered considerably earlier next year, as US exports start to decline in line with lower US production due to herd rebuilding.
South Korea regularly ranks among Australia’s most important export beef customers, both for volume and quality. For the calendar year to the end of November volume reached 173,857t, up 20pc on the same period a year earlier.
Apart from last year, Australia has frequently triggered its Korean Safeguard tariff during the final quarter of the year.
As part of the gradual relaxation under the Korea-Australia FTA, duty rate on Australian imported beef from 1 January next year will fall to 10.6pc, down from the current level of 13.3pc. The Safeguard tonnage limit will rise a little to 188,437t next year.
Korea’s duty rate on US imported beef (dominated by one cut – bone-in short-rib, which is highly prized by Korean consumers) is currently 8pc, because the US is several years ahead of Australia in its FTA path with Korea.
Tariff rate on US beef next year will decline to 5.3pc, before diminishing to zero in 2026. Australia’s equivalent tariff wind-down reaches zero in 2028.