EXPLANATORY STATEMENT
DEPARTMENT OF AGRICULTURE
Australian Meat and Live-stock Industry
(Beef Export to the United States of America – Quota Years 2015-21)
Order 2014
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.
The order outlines the quota administrative processes that operate on an annual basis. For the purpose of this order, the quota year runs from 1 January to 31 December.
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 to cover future quota years. 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 ID 17530).
Summary of Order
The order explains how beef may be exported tariff free to the US.
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 Entitlement (PTE) 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 PTEs.
Explanation of Amendments
The amendments are primarily to the dates to reflect the timelines applying to the 2015-21 quota years.
In addition, several minor amendments were made to improve the readability of the legislation and ensure the trigger day provisions are correctly set out in the order.
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 future quota years.
Overview
The Australian Meat and Livestock Industry (Beef Export to the United States of America – Quota Years 2015-21) Order 2014 was enacted to manage the export of beef to the United States of America, ensuring that Australian beef exports remain within the agreed quota system. This order was introduced to address the need for a structured and fair system for allocating export quotas among licence holders, as required under the Australian Meat and Livestock (Quotas) Act 1990 and the Australian Meat and Livestock Industry Act 1997. The order was made under the authority of section 17 of the Australian Meat and Livestock Industry Act 1997, which allows the Secretary of the Australian Government Department of Agriculture to establish a quota allocation scheme. The order details the processes for administering the beef export quota, including the first-come-first-served basis for quota allocation and the safeguard trigger provisions to be applied if a certain percentage of the quota is reached before a specified date. The amendments primarily adjust the order to reflect the timelines for the quota years 2015 to 2021, and include minor changes to improve readability and ensure the correct implementation of the trigger day provisions.
Scope and Application
The Australian Meat and Livestock Industry (Beef Export to the United States of America – Quota Years 2015-21) Order 2014 applies to entities involved in the export of beef from Australia to the United States under a tariff rate quota regime, which is managed by the Australian Government Department of Agriculture. The order outlines the administrative processes for managing beef exports, including the allocation of export licences and the use of Provisional Trigger Entitlements (PTEs) to manage the quota. The order is applicable to all entities exporting beef to the US under this quota system, without specific allocations to individual companies. Instead, the quota is managed on a first-come-first-served basis, with additional safeguards to ensure the quota is fairly distributed if a significant portion of the quota is reached before a specific date in the quota year. The order applies nationally within Australia, covering all entities involved in the export of beef to the US, subject to the quota system established under the Australian Meat and Livestock (Quotas) Act 1990 and the Australian Meat and Livestock Industry Act 1997. The order also extends its application through subordinate instruments, which may include further regulations or guidelines issued by the department to manage the quota system effectively.
Key Provisions
The Australian Meat and Live-stock Industry (Beef Export to the United States of America – Quota Years 2015-21) Order 2014 (referred to as the "Order") (section 1) provides the administrative framework for the export of beef to the United States of America (US) during the specified quota years. Under this Order, beef exports to the US are managed through a tariff rate quota regime, with no specific allocations to individual companies but rather on a first-come, first-served basis (section 6). This Order outlines the processes for the allocation and management of the quota, including the safeguard trigger mechanism that applies if the quota is expected to be filled before 1 October (section 7). Exporters must acquire a quota certificate to land beef tariff free in the US (section 11).
The Order imposes several obligations on entities involved in the export of beef to the US. Exporters must ensure that their shipments comply with the quota arrangements and obtain the necessary quota certificates (section 11). In addition, eligible exporters must adhere to the procedures for Provisional Trigger Entitlements (PTEs) if the safeguard trigger is activated (section 7). The Order also details the rules for the calculation, use, non-use, and trade of PTEs, ensuring that all exports are managed in accordance with the established quota system (section 12). Furthermore, the Order mandates that the US beef quota system is managed on an industry-agreed cost recovery basis, with administrative changes being mechanical and not requiring consultation (section 14).
Breaches of the provisions outlined in the Order may result in civil or criminal consequences. For instance, exporting beef without a valid quota certificate or misusing a quota certificate could lead to penalties under the Australian Meat and Live-stock (Quotas) Act 1990 and the Australian Meat and Live-stock Industry Act 1997. Although the Order itself does not specify maximum penalties, the underlying Acts provide for penalties that may include fines and, in severe cases, imprisonment. These provisions are intended to ensure compliance with the quota system and the fair and orderly management of beef exports to the US.