Currently a global tariff rate quota (TRQ) system operates on greasy and lightly processed wool. Wool sold over and above the quota attracts a duty of 38 per cent which creates a significant cost to Chinese buyers and a disincentive for demand for Australian wool.
The meeting follows the recent release of a report which found that if wool was included in a free trade agreement, the Australian wool industry could expect increases in farm cash income of up to seven per cent over and above that which would occur without an FTA.
The report, by ITS Global, was commissioned by AWI to investigate the impact of an Australia-China FTA on the industries both in Australia and in China. It found that removal of the TRQ would result in Australian greasy wool exports to China increasing by up to 20 per cent over and above the expected increase in the trade without an FTA.
Mr van Rooyen stated that the industries in both countries have much to gain from wool's inclusion in an Australia-China FTA. Over the next five years China will command 62 per cent of global apparel wool demand. If Australia is to benefit from this expansion, restrictions to trade must be removed.
Australian Wool Innovation Limited (AWI) is a research and development organization that works with woolgrowers, researchers, processors and manufacturers.
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