Australia and India ink new Trade Agreement
It has been in the works for a long time, but it appears Australia and India have finally concluded their Economic Cooperation and Trade Agreement (IndAusECTA) on April 2, 2022. The agreement provides for competitive tariff elimination or reduction on a wide range of goods including Australian almonds. The aim is to enhance bilateral trade to $54 billion in the next five years which is currently at $27.5 billion. As soon as the Agreement is ratified by both parliaments, India has agreed to create a combined annual tariff rate quota up to 34,000 MTs for shelled and inshell Australian almonds.
From the information available, it appears importers will be required to obtain import licenses to utilize the TRQ. The in-quota rate will be 50% of the current MFN rate which would equate to 17.5 rps/kg for inshell and 50 rps/kg for shelled almonds. Meantime, the U.S. duties, given retaliatory tariffs, remain at 41 rps/kg for inshell, and 120 rps/kg for kernels. This is only the second agreement that India has signed in the last 10 years. The last agreement India signed was with Japan in 2011 followed by the UAE and now Australia in 2022.
The deal with India removes tariffs on more than 85% of Australian goods exported to India, worth US$9.4 billion, rising to almost 91% over 10 years. Tariffs will be eliminated on sheep meat, wool, copper, coal, alumina, fresh Australian rock lobster, and some critical minerals and non-ferrous metals to India. It will see 96 percent of Indian goods imports enter Australia duty-free. Australia is currently negotiating nine FTAs including bilateral agreements with three of its largest trading partners, China, Japan and South Korea. Meanwhile, the United States is waiting to engage in talks related to the proposed Indo-Pacific Economic Framework.
Transportation-Logistics Update
The Senate unanimously approved the Ocean Shipping Reform Act in a vote last week. The bill’s support comes at a time of peak congressional concern over the resiliency of American supply chains, which has become an even more critical issue in light of the Ukraine/Russia conflict. The bill, which aims to ease maritime supply chain issues, “is designed to support the growth and development of U.S. exports and promote reciprocal trade in the common carriage of goods by water in the foreign commerce of the United States.”
The bill now goes into a process to work out the differences between the House and Senate versions. Once the differences are worked out, the bill will need to pass both chambers a second time. Have logistics updates you want to share? Please contact: bdensel@almondboard.com
The EU hits “Pause” on its Sustainable Food Strategy
The war in Ukraine has “pressed the pause button” on the EU’s flagship food policy, the Farm to Fork strategy, but the long-term ambition for the sector remains unchanged, according to the EU Health Commissioner Stella Kyriakides.
Between skyrocketing food prices and shortages of key inputs such as fuel and fertilizer, the war has sent the EU agri-food sector reeling. “We’re working hard to address global food security and for food affordability in the EU, including finding alternative feed sources for the short term,” said EU Health Commissioner Kyriakide. EU Commission and European industry have been meeting frequently to identify those temporary measures and policy implications brought about by the war and disruption to food supply systems. Several short-to-medium term measures are being considered to minimize disruption, which include allowing farmers to plant crops on marginal/set-aside lands, packaging label changes, etc.
