EXPLANATORY STATEMENT
DEPARTMENT OF AGRICULTURE
Australian Meat and Live-stock Industry
(Beef Export to the United States of America – Quota Year 2014)
Order 2013
Statutory Basis
Under the Australian Meat and Live-stock (Quotas) Act 1990 and the Australian Meat and Live-stock Industry Act 1997, the Secretary of the Australian Government Department of Agriculture (the department) may, where restrictions are imposed on exports of Australian meat, establish a scheme to allocate quota among holders of export licences.
This order is made under section 17 of the Australian Meat and Live-stock Industry Act 1997.
Background to Order
In 1995 the United States of America (US) applied a tariff rate quota regime to certain beef imports as part of the World Trade Organisation (WTO) Uruguay Round outcome. When the quota was filled in 2001 the Australian Government agreed to industry requests to establish a quota administrative system for the fair and orderly management of beef exports to the US.
In 2005 the Australia-US Free Trade Agreement (AUSFTA) came into effect, providing additional access amounts for beef. Since 2005 Australia has had tariff free in-quota access with quota amounts increasing in set stages. This arrangement will continue until 2022 when in that year the out-of-quota tariff will become zero and a quota management system will no longer be required. Instead, from 2023 a US safeguard provision will allow for beef exports in excess of 448 634 tonnes to be subject to a price-based tariff.
For the purpose of this order, the quota year is from 1 January 2014 to 31 December 2014.
Consultation
The US beef quota system is managed by the department on an industry-agreed cost recovery basis. The current administrative system was put in place in 2006 following a review of the 2002 arrangements. US beef orders are re-issued each year to accommodate calendar changes and on-going developments under the AUSFTA. These changes are mechanical in nature and do not require consultation.
The regulatory impact analysis conducted in line with Office of Best Practice Regulation guidelines indicates the changes would have low or no impact on businesses (OBPR ID13073).
Summary of Order
The US beef quota access is 413 214 tonnes, which combines the static WTO amount of 378 214 tonnes and the increasing AUSFTA amount, which from 2006 to 2014 totals 35 000 tonnes. The order explains how beef may be exported tariff free to the US in 2014.
There are no company-specific quota allocations. The quota is managed on a first-come-first-served (FCFS) basis with a safeguard trigger applying if shipments to the US reach 85 per cent of the quota before 1 October in any year. If it appears the trigger level will be reached, eligible exporters (as defined in section 9 of the order) will be informed of their Provisional Trigger Allocation (PTA) prior to the trigger day. Where the trigger level is not reached, the FCFS arrangements will continue.
An exporter requires a quota certificate to land the beef tariff free in the US. The order details the procedure for acquiring such a certificate and the rules that apply to the calculation, use, non-use and trade of PTAs.
Explanation of Amendments
The amendments are primarily to the dates to reflect the timelines applying to the 2014 quota year.
In addition, several minor amendments were made to improve the readability of the legislation. References that were circular and definitions that were considered unnecessary were removed.
Human Rights Compatibility
The amendments to the Order are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The amendments to the order do not raise any human rights issues as their focus is on continuing existing administrative arrangements into the next quota year.
Overview
The Australian Meat and Livestock (Beef Export to the United States of America – Quota Year 2014) Order 2013, made under section 17 of the Australian Meat and Livestock Industry Act 1997, was introduced to manage the allocation and export of beef quota to the United States for the quota year 2014. This order was established to ensure the fair and orderly management of beef exports to the US, continuing the administrative system put in place in 2006 following the implementation of the Australia-US Free Trade Agreement (AUSFTA) and the World Trade Organisation (WTO) Uruguay Round outcome. The order sets out the procedures for beef exporters to acquire quota certificates and outlines the rules for calculating, using, non-use, and trading Provisional Trigger Allocations (PTAs), while maintaining compatibility with human rights as declared in relevant international instruments.
Scope and Application
The Australian Meat and Livestock (Beef Export to the United States of America – Quota Year 2014) Order 2013 applies to all entities engaged in the export of beef from Australia to the United States during the specified quota year, from 1 January 2014 to 31 December 2014. This includes meat processors, exporters, and other participants in the beef supply chain who intend to export beef within the allocated quota. The Order operates within the legislative framework provided by the Australian Meat and Livestock (Quotas) Act 1990 and the Australian Meat and Livestock Industry Act 1997, and it is administered by the Department of Agriculture. The quota system is designed to manage the export of beef to the US in a fair and orderly manner, adhering to the established tariff rate quota regime and the additional access provisions set forth in the Australia-US Free Trade Agreement. The Order does not specify allocations for individual companies but instead operates on a first-come-first-served basis, with specific triggers and safeguards to manage the quota effectively. The amendments primarily reflect the new timeline for the 2014 quota year and aim to enhance the clarity and readability of the legislation.
Key Provisions
The Australian Meat and Livestock Industry (Beef Export to the United States of America – Quota Year 2014) Order 2013 primarily establishes the rules for the allocation and management of beef export quotas to the United States for the quota year spanning 1 January 2014 to 31 December 2014. Under Section 17 of the Australian Meat and Livestock Industry Act 1997, the Secretary of the Australian Government Department of Agriculture is empowered to create this scheme to allocate quota among export licence holders. This order aims to ensure the fair and orderly management of beef exports, considering the tariff rate quota regime imposed by the US as part of the WTO Uruguay Round outcome, and the additional access provided by the Australia-US Free Trade Agreement (AUSFTA). The order outlines that there are no company-specific quota allocations and instead, the quota is managed on a first-come, first-served (FCFS) basis.
The order imposes several obligations on the parties involved. Firstly, eligible exporters must adhere to the FCFS arrangement unless a safeguard trigger is activated. If the shipments to the US reach 85% of the quota before 1 October in any year, the safeguard trigger is activated, and exporters will be informed of their Provisional Trigger Allocation (PTA) prior to the trigger day. Exporters are required to apply for and obtain a quota certificate to land the beef tariff-free in the US, as stipulated in the order. The order also details the rules governing the calculation, use, non-use, and trade of PTAs. Additionally, the quota management system is conducted on an industry-agreed cost recovery basis, ensuring that the administrative costs are fairly distributed among the participants.
In the event of non-compliance with the provisions of the order, various consequences may arise. While the specific offences, penalties, or civil/criminal consequences are not explicitly detailed in the explanatory statement, it is reasonable to infer that breaches of the quota management rules or failure to adhere to the outlined procedures for obtaining and using quota certificates could lead to administrative penalties or legal actions. Given the importance of the quota management system in maintaining the trade relationship between Australia and the US, any significant breaches could result in serious repercussions for the involved parties, including potential financial penalties, revocation of export licences, or other legal actions as deemed necessary by the relevant authorities.
The order ensures that the amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Since the focus of the amendments is on continuing existing administrative arrangements into the next quota year, no human rights issues are raised by the changes. This compatibility with human rights standards underscores the government's commitment to upholding human rights while managing the beef export quota system effectively.