Australia up in arms over 20% US lamb tariff

By Boyd Champness

AUSTRALIAS political leaders and the farming community are banding together to fight a move by US bureaucrats to slap a 20% tariff on lamb imports.

A high-powered delegation of lamb industry leaders and politicians will head to Washington to lobby senior officials in the Clinton administration in a bid to protect Australias thriving lamb export industry, The Weekly Times newspaper said last week.

Imported lamb levels have doubled in the US over the past five years from 15% to 30%.

The US represents Australias fastest growing and most valuable market, taking about 22% of Australias total lamb exports last year worth (AUD) $108 million.

To give an indication of its importance, the US market is about four times the value of Australias second most valuable export market, the UK.

The US tariff proposal, announced by the US International Trade Commission last week, has been widely condemned by Australias federal and state governments, Meat and Livestock Australia (MLA) officials and farmers.

The commission recommended tariffs be placed on imported lamb for four years in a bid to boost the struggling and inefficient American sheep industry.

The Stock and Land reports that three of the six commissioners supported a plan that would apply a 20% tariff on lamb meat imports above 1998 levels of 35,000 tonnes, reducing to 17.5% on imports above 37,000 tonnes in the second year, 15% in the third year and 10% in the fourth year.

Two commissioners called for a 22% tariff on all lamb imports during the first year, phased down to 10% in the fourth year.

A third proposal, made by one commissioner, would impose a strict quota of 23,000 tonnes in the first year, which would increase to 31,750 by the fourth year.

US president Bill Clinton has 60 days to consider the proposals with most industry experts expecting the first plan to get up.

Australia has increased its share of the US lamb market from 9102 tonnes in 1994 to 17,000 tonnes in 1998.

But if the tariff goes ahead, any attempts to build on last years tonnage would result in hefty penalties.

According to The Weekly Times, a 20% tariff would equate to a (AUD) $1.27 million tax on Australian lamb exports to the US in 1999, based on industry growth forecasts. It claims the tariff could all but stop growth in exports to the US.

Australian Trade Minister Tim Fischer said the proposal would send the wrong message on the eve of the millennium World Trade Organisation negotiations.

“Australia will be making it absolutely clear to the US that we do not accept that there should be any restraint on our trade, that any restraint would be against the interests of the US lamb market,” he told The Weekly Times.

“What we expect from the US is leadership, not pandering to protectionist pressure.”

MLA is forecasting a 6% rise, or 1000 tonne increase, in lamb exports to the US this year. A 20% tax would mean a (AUD) $1.27 million or (AUD) $1.27/kg (dressed weight) extra cost for American buyers.

MLA market analyst Peter Weeks said that a 20% tariff “would certainly jeopardise that 6% growth.”

(For earlier stories on the US lamb tariff see Aussie Report 22 February 1999 and 8 March 1999.)