general agreement on - world trade organization

GENERAL AGREEMENT ON RESTRICTED DPC/INV/2/Add.3

TARIFFS AND TRADE 22 March 1983

International Dairy Arrangement Original: English

INTERNATIONAL DAIRY PRODUCTS COUNCIL

Reply to Questionnaire 5 Regarding Information on Domestic Policies and Trade Measures

AUSTRALIA

Australia is one of the more efficient, relatively low-cost dairy-producing and exporting countries. The outlook in the mid-1970s was for world dairy trade to be chronically depressed for some time to come, largely as a result of lack of access to, and frequent disruption from dumping of surplus production on, world markets. In response, Australia implemented measures designed to contract and rationalize its industry with a view to bringing production into line with remunerative outlets.

Milk production has been reduced from 7,523 million litres in 1969/70 to 5,199 million litres in 1981-82. There has also been some change in the mix of dairy products, away from butter, skim milk powder and casein to cheese and whole milk powder. Exports of butter have fallen from 81,568 tonnes in 1969/70 to about 7,200 tonnes in 1981-82. Exports of cheese and whole milk powder, however, increased from 40,841 to 57,400 tonnes and 15,326 tonnes to 43,300 tonnes respectively over the same period.

A. Production

Support and stabilization measures

The Australian Government has sought to encourage rationalization in the dairy industry by statutory marketing arrangements and the underwriting of the equalized returns for major dairy products at realistic prices.

Legislation was passed by the Australian Parliament in June 1977 to provide for a levy/disbursement scheme.

The legislation imposes levies on the production of prescribed products but provides for them to be payable only on the usage or sale on the domestic market of such products. (Prescribed products are listed in Section B.) Under these arrangements, levies collected from domestic sales are distributed so as to equalize returns from domestic and export markets for each prescribed product. Levies distributed in this way are termed "stabilization payments".

An important consideration which is taken into account in the determination of the level of stabilization levies is the underlying long-term trend in prices at which dairy products generally enter world trade.

83-0585

DPC/INV/2/Add.3

In addition to the statutory marketing arrangements, an underwriting scheme for manufactured dairy products prescribed under the domestic marketing arrangements has operated since 1978. New underwriting arrangements were introduced from 1 July 1981 with a view to providing a more objective method for determining underwriting values.

For the 1981-1982 and 1982-1983 seasons, the Government is underwriting gross equalized pool returns for the total production of each of the prescribed dairy products at 95 per cent of a three-year moving average of gross equalized pool returns. This three-year moving average comprises the returns forecast for the year in which underwriting is being determined and the returns in the two previous years.

The objective of underwriting is to protect producers against unexpected and sharp market price falls. If a fall in market prices pulls the gross pool returns below the underwriting values, the difference is met by the Government.

The level of underwriting values for prescribed products for the 1981-1982 and 1982-1983 seasons are shown below:

Product 1981-1982

$A per tonne

1,655 1,490 835

2,085 1,110

1982-1983

$A per tonne

1,850 1,575 875

2,155 1,150

Butter Certain cheeses Skimmed milk powder Casein Whole milk powder

There was no cost to the Government for underwriting in respect of the 1981-1982 season and the same is estimated to be the case for the 1982-1983 season.

The Australian Government has requested the Industries Assistance Commission (IAC) to undertake a broad-ranging inquiry into the dairy industry. As part of this inquiry, the IAC has been asked to report by end of May 1983 on whether underwriting assistance for prescribed dairy products should continue for the 1983-84 season.

The Government provides a guarantee to the Reserve Bank of Australia for repayment (with interest) of monies borrowed by the Australian Dairy Corporation for the purpose of making advance payments to manufacturers on the production of prescribed products. Manufacturers receive advances of up to 100 per cent of the underwritten values of such products which enables them to make maximum early payments to dairy farmers. There have been no instances in the past of the Reserve Bank making recourse to the Commonwealth Government for repayment of monies loaned to the Corporation for advance payments.

DPC/INV/2/Add.3

B. Internal prices and consumption

Domestic bulk wholesale prices, supported by a stabilization levy arrangement, for prescribed dairy products from 1 December 1982 are as follows:

Butter/butter oil (cbe) Leviable cheese Buttermilk powder, modified skim milk powder, skim milk and buttermilk powder mixtures, skimmed milk powder

Whole milk powder Casein

$A per tonne

2,415 2,250 1,155

1,740 3,000

Average retail prices for selected dairy products in the city of Sydney for the July-September quarter of 1982 were as follows:

Item

Milk - bottled, delivered Milk - powdered, full-cream Cheese - processed Butter

Unit

2 x 600 ml. 1 kg. can 500 g. 500 g.

Cents

75 395 167 156

Average retail prices for selected dairy products in the city of Sydney for the October-December quarter of 1982 were as follows:

Item

Milk, bottled, delivered Milk, powdered, full cream Cheese - processed Butter

Unit Cents

2 x 600 ml. 1 kg. can 500 g. 500 g.

78 409 173 159

Measures at the frontier

Customs tariff

Import duties are levied at the levels specified in Appendix A.

Other measures

(i) Imports

As a member of GATT since its inception Australia has placed considerable emphasis on avoiding measures contrary to the spirit of that Agreement. In the case of dairy products, the only constraints which Australia imposes on imports other than under the tariff are those relating to compliance with commerce marking and/or quarantine raqui^ene":3 'sea Aprtncix E).

cbe = commercial butter equivalent 2 For 1982-83 season, leviable cheese includes Cheddar, Stirred Curd,

Granular, Colby, Cheedham and Monteray, but now does not include Gouda.

DPC/INV/2/Add.3

Australia has tariff rate bindings on dairy products under the GATT negotiated during the Multilateral Trade Negotiations 1973-79 (see Appendix C).

At the time of importation, sales tax is collected on imported goods. The tax is at the same level as is charged on domestic goods at the point of wholesale distribution.

Australia has acceded to the CCC Nomenclature Convention and so is obliged to observe the requirements of the CCCN in its tariff.

Australia has a number of bilateral commitments relating to dairy products (see Section D).

(ii) Exports

Export measures at tariff line level

As indicated in Section A above, returns from domestic and export sales of butter, cheese, skim milk powder, whole milk powder and casein are pooled and equalized returns are made to manufacturers.

D. Bilateral, plurilateral and multilateral agreements

The Australia-New Zealand Closer Economic Relations Trade Agreement entered into effect on 1 January 1983. Its objective is to further liberalize trade between Australia and New Zealand, including trade in dairy products. A Joint Dairy Industry Consultative Committee has been established to allow for consultation between the Australian and New Zealand industries and through this the amount of dairy products shipped from New Zealand to Australia is agreed annually.

Within the Tokyo Round of GATT Multilateral Trade Negotiations Australia concluded agreements on dairy products with the EEC and the United States.

Under the MTN bilateral agreements on dairy products Australia received access to the EEC market for 2,500 tonnes of Cheddar for direct consumption and 500 tonnes of Cheddar for processing, per annum. Exports are subject to an import levy of ECU 120.9/tonne and to minimum import prices equivalent to a c.i.f. value of ECU 2,719.2/tonne for cheese for direct consumption and ECU 2,477.4/tonne for cheese going to processing. Australia granted the EEC duty-free access for soft-surface ripened cheese, Stilton, Roquefort and goat's milk cheese. In addition it granted guaranteed access for not less than 1,000 tonnes of Edam and Gouda per annum at existing rates of duty and 2,500 tonnes of other cheese (excluding Cheddar, Feta and Kasseri) per annum at existing rates of duty.

The United States granted Australia an annual quota entitlement of 4,000 tonnes of cheese broken up into a number of cheese varieties plus an annual quota entitlement of 2,000 tonnes of chocolate crumb over 5.5 per cent fat content.

DPC/lNV/2/Add.3

APPENDIX A

Australian Tariff Abbreviations Used

DC Developing country

DPC Declared preference country

FI Forum Islands

PNG Papua New Guinea

NZ New Zealand

kg. Kilogram

Application of rates of duty

The general rate of duty applies to goods from all countries, unless indicated otherwise.

DPC/lNV/2/Add.3

Division 1 Chapter 4/1

CUSTOMS TARIFF - SCHEDULES

(1 January 1983)

Chapter 4

Dairy Produce; Birds' Eggs; Natural Honey; Edible Products of Animal Origin, not elsewhere Specified or Included

Reference No.

04.01

04.02

04.03

04.04

04.05

04.06

04.07

Goods

*Milk and cream, fresh, not concentrated or sweetened

*Milk and cream, preserved, concentrated or sweetened

*Butter

*Cheese and curd

*Birds' eggs and egg yolks, fresh, dried or otherwise preserved, sweetened or not

*Natural honey

*Edible products of animal origin, not falling within any other item

CHAPTER NOTES

1. In this Schedule, "milk" means full cream milk, skimmed milk, buttermilk, whey, curdled milk, képhir, yoghurt and other fermented or acidified milk.

2. For the purposes of 04.02 -

(a) milk or cream put up in hermetically sealed cans shall be regarded as preserved; and

(b) milk or cream not put up in hermetically sealed cans shall not be regarded as preserved by reason only of being pasteurized, sterilized or peptonized.

DPC/INV/2/Add.3


Column 1 Reference

No.

Statistical

Code Unit Column 2 Goods

Column 3 Column 4 ! General 'Special rate rate

04.01.000 *Milk and cream, fresh, not Free concentrated or sweetened

10 kg.

04.02.00

39

04.03.000 i

04.04 l 04.04.100

4X

50

61

13

kg.

kg-,

kg.

kg.

kg.

*Milk and cream, preserved, j$0.05/kg. concentrated or sweetened

; j

Whey

Other: j

Powdered or granulated: - containing not more than 1.5 per cent by weight of fat i

- containing more than 1.5 per cent by weight of fat j

i Other

i *Butter $0.10/kg.

*Cheese and curd:

- Cheese which, in the opinion . Free of the Collector, is cheese of a following type: (a) surface-ripened soft

cheese having -(i) a fat content in

the dry matter of not less than 50 per cent by weight; and

1 NZ rate appears in Schedule 5. Unless otherwise indicated:

general rate applies to all sources except NZ and PNG PNG rate is Free DC rate applies to FI and DPC countries

DPC/INV/2/Add.3


! Column 1 Reference

No.

04.04.100 (cont'd)

r ' " :Statistical

Code

263

274

285

296

30X

Unit

kg.

kg-

kg.

kg.

kg.

.....

Column z Goods

(ii) a moisture content of not less than 65 per cent by weight of the non-fatty matter,

but not including cheese having mould distributed throughout its interior;

(b) cheese made wholly from goats' milk, other than fetta and kasseri;

(c) stilton cheese; (d) roquefort cheese

Cheese made wholly from goat's milk, other than fetta and kasseri

Roquefort

Stilton

Soft surface-ripened cheese:

Camembert

Other

Column 3 j Column 4 General ! Special rate rate

I

;



DPC/lNV/2/Add.3

CUSTOMS TARIFF SCHEDULES


Column 1 Reference

No.

Statistical Code Unit

Column 2 Goods

Column 3 General rate

Column 4 Special rate

04.04.900

187

427 438

471 482 212

223 245 347 256 449 267 278 289 358 29X

303 314 460 45X

336

-Other

Cheese:

Processed (including pastes and spreads):

kg. ' -• Cheddar i - Emmenthaler:

kg. In packs not exceeding 284 g. kg. I Other

- Gruyère: kg. In packs not exceeding 284 g. kg. Other kg. - Other

j Other: kg. - Blue-veined kg. | - Cheddar kg. - Colby kg. - Edam kg. - Emmenthaler kg. - Gouda kg. - Fetta kg. - Kasseri kg. - Mozzarella/pizza kg. - Parmesan (including

parmigiano and reggiano types)

kg. - Pecorino kg. - Provolone kg. - Swiss kg. - Other

kg. Curd

$0.096/kg. FJ:Free

[17.02.300 -Lactose 20% 39



DPC/INV/2/Add.3

(Column 1 jReference

No.

21.07.900

35.01

35.01.100

35.01.900

35.02.000

Statistical Code

135

146

157

248

168

179

237

226

215

22

26

12

Unit

kg.

kg.

kg.

kg.

kg.

kg.

kg.

kg.

Column 2 Goods

-Other

Frozen confections:

Ice cream

Other

Ice cream mix

Jellies

Mixtures of chemicals and foodstuffs

Preparations for making nonalcoholic beverages

Syrups

Vegetable extracts, NSA

Other

*Casein, caseinates and other casein derivatives; casein glues:

-Goods, as follows: (a) casein; (b) ammonium caseinate; (c) sodium caseinate; (d) casein glues

-Other

*Albumin, albuminates and other albumin derivatives

j Column 3 General rate

5%


DC:Free

! ! i i ;

15%

1

5% DC:Free

!

Free

NZ rate appears in Schedule 5. Unless otherwise indicated:


DPC/lNV/2/Add.3

CONSOLIDATED BY-LAW REFERENCES

(PART I)

Tariff Reference

04.02

04.02

04.04

35.01

Description of goods

Demineralised whey powder, for use in the manufacture of infant's food, under security (Op. 4.10.78 - Det. date 26.2.80 - BL 7952091)

Protein concentrates, for use in the formulation of beverages, under security (Op. 4.10.78 - BL 7856686)

Cheese, as follows: (a) surface-ripened soft cheese having -

(i) fat content in the dry matter of not less than 50 per cent by weight; and

(ii) moisture content of not less than 65% by weight of the non-fatty matter;

(b) cheese made wholly from goat's milk, other than fetta and kasseri;

(c) Stilton cheese; or (d) roquefort cheese

This by-law applies to cheese which, in the opinion of the Collector is, or is certified to the satisfaction of the Collector as being, a cheese of the foregoing type.

Note:

For the purpose of this by-law "surface-ripened soft cheese" does not include cheeses with yeasts and other organisms on the surface which also contain moulds, blue or otherwise, distributed throughout the interior of the cheese (Op. 1.1.80 - BL 7961490)

Goods to which 35.01.9 applies (Op. 1.7.74 - BL 7455563)

By-law provision and validity date

19

19

04.04.1 31.12.82

19

DPC/lNV/2/Add.3

CUSTOMS TARIFF SCHEDULE 4 - PART I

Special Concessional Rates of Duty

SCH 4/10

Column 1 Item

Reference jTreat. no. < code

Statistical Code Unit

Column 2 Goods

Column 3 General rate


19

777

: 787

;

Goods, as prescribed by by-law, being goods a suitable equivalent of which that is the produce or manufacture of Australia is not reasonably available

Standing references

Ad hoc by-laws

2% PNG:2%

F Enter under tariff classification and statistical requirements in Schedule 3

Unless otherwise indicated: - General rate applies to all sources except NZ and PNG

NZ and PNG rate is Free DC rate applies to PI and DPC countries

DPC/INV/2/Add.3

CUSTOMS TARIFF

SCHEDULE 5

Import of dairy products from New Zealand - Free.

DPC/INV/2/Add.3

APPENDIX B

Quarantine requirements

Due to geographic isolation and to strict quarantine controls, Australia remains free of many of the serious diseases which occur in many other parts of the world. Food products of animal origin may only be imported into Australia in accordance with the provisions of the quarantine legislation. The specific purpose of the legislation is to prevent the entry to Australia of exotic diseases.

The Australian Department of Health is responsible for the administration of quarantine provisions relating to the importation of foods. Many foodstuffs are prohibited from importation unless the permission in writing from the Minister for Health has been granted.

The importation of foodstuffs of animal origin is subject to restrictions in the case of certain countries, or, made subject to certain conditions according to the disease status of the exporting country and the degree of assessed quarantine risk associated with the animal or animal product concerned.

In the specific case of dairy products, milk (including dried or powdered milk, condensed or concentrated milk and milk albumen) cream, butter and ice cream, may be imported by sea or air, but only when produced in and consigned from Canada, Denmark, Finland, Japan, New Zealand, Norway, Sweden, Irish Republic, Great Britain and the United States, unless permission is granted by the Director of Quarantine, Canberra, for importation for therapeutic or scientific purposes.

Cheese from countries other than those mentioned above is subject to 120 days quarantine unless exempted by the Director of Quarantine, Canberra, on the basis that the manufacturing process, as submitted, is such as would inactivate the virus of foot and mouth disease. Some 90 per cent of European cheeses for which exemption has been sought, have been so exempted.

Prepared infant food containing milk may be imported in a quantity not exceeding 1 kg. with an infant under two years of age arriving on a vessel or aircraft from any country. The importation of cheese of the type which contains meat or meat products or which is enclosed in a casing of animal origin is prohibited.

Casein shall not be imported unless:

(a) The Director of Quarantine or a person authorized by him, being satisfied that the casein is to be imported for purposes other than commercial food production, has consented in writing to the importation of the casein; or

DPC/INV/2/Add.3

(b) the casein, and the milk from which it was made, were produced in Canada, Denmark, Finland, Ireland, Japan, New Zealand, Norway, Sweden, United Kingdom or United States and the casein is:

(i) imported from the country in which it was produced; and

(ii) landed in Australia in the packing in which it was last packed in the country in which it was produced.

Commerce, weights and measures

The Commerce (Trade Descriptions) Act and regulations thereunder came into operation in 1906 and were designed essentially to:

(a) protect those traders who correctly describe their goods from the actions of competitors who, by false or misleading descriptions, deceive the consumer;

(b) protect the consumer by requiring, in cases where the proper maintenance of the public health or the public interest makes it expedient, that manufacturers shall indicate on their goods the nature of the ingredients or materials of which they are composed; and

(c) ensure that inferior kinds of goods are not passed off as being of the best quality.

The principle for the application of the commerce marking legislation is that compatible requirements exist in respect of locally-produced goods.

Following the introduction by State governments of legislation concerning pre-packed articles, Federal legislation was introduced by the Australian Government in 1972 which requires descriptions and net weights to be indicated.

Under these regulations dairy product weights and measures on imports must be in metric terms, however, dual systems (i.e. metric and imperial specifications) are still allowed.

DPC/INV/2/Add.3

APPENDIX C

Under the General Agreement on Tariffs and Trade, Australia has agreed:

not to apply to imports from GATT countries rates of duty in excess of those set out below for the following goods:

04.04 Cheese and curd:

ex Cheese other than cheese having the eye formation characteristic of the Swiss or Emmentaler type, cheese of the Gruyère or Emmentaler processed type in packs not exceeding 284 g., Cheddar, Fetta or Kasseri:

Stilton and Roquefort types; cheese made from goats' milk; surface-ripened soft cheese, having (a) fat content in the dry matter of not less than 50 per cent by weight, and (b) moisture content of not less than 65 per cent of the non-fatty matter, but excluding cheese with yeasts and other organisms on the surface which also contain moulds, blue or otherwise, distributed throughout the interior of the cheese Free

Edam and Gouda types

Other varieties

$0.096/kg. for not less than lOOOt p.a.

$0.096/kg. for not less than 2500t p.a.

35.02 Albumins, albuminates and other albumin derivatives Free

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