MT5/96
Media Release
10 January 1996
Australia Welcomes Cuts in Mexican Wool Tarrifs
The Australian Government's strategy to increase the value added to
Australia's primary products before they are exported received a major boost
today with Mexico's decision to eliminate tariffs on processed wool, the
Minister for Trade, Senator Bob McMullan, and the Minister for Primary Industries
and Energy, Senator Bob Collins, said today.
Australian wool growers and processors stand to benefit greatly from Mexico's
decision to remove tariffs on wool tops and scoured and carbonised wool,
the Ministers said.
"This breakthrough is yet another successful outcome of the Government's
program of carefully researched and targeted bilateral trade activities
on behalf of Australian exporters.
"Australian wool exporters will now have access to the large Mexican
market on an equal basis with competitors from other countries which enjoy
a zero tariff under preferential trading arrangements."
The potential value of Australian exports of wool tops to Mexico is estimated
by industry sources at over $25 million.
In 1994/95, Mexico imported greasy wool worth $20 million from Australia
to which a tariff of only 0.1 per cent applied. Australian exports of processed
wool, however, faced a 10 percent tariff on higher processed wool tops while
competitors, primarily in South America, enjoyed tariff free entry to Mexico.
Mexico's only first stage top processing plant is being closed, removing
the market for Australian greasy wool. The Ministers said the elimination
of the 10 per cent tariff facing Australian wool tops will provide a major
boost to our wool industry.
"It also reinforces the Government's initiatives to increase the export
of higher value added wool tops rather than greasy wool, and paves the way
for a strategic alliance between Australian wool processors and Mexican
textile companies," the Ministers said.
The Ministers said the tariff cut is a successful outcome of Senator McMullan's
trade mission to Mexico City last year which included bilateral Ministerial
trade talks on the issue.
"We commend the Mexican Government for responding positively to the
representations by the Australian Government and Australian industry groups,"
the Ministers said.
"These tariff cuts are evidence of the effectiveness of the Government's
bilateral representations and trade frameworks.
"Australia stands to reap further benefits because Mexico is not an
ordinary market.
"In terms of wool, it has enormous potential to expand into a major
textile producer and exporter through its special terms of access to North
America through the North American Free Trade Agreement (NAFTA).
"Under the rules of NAFTA, Mexico has scope to become a major supplier
of textiles to the massive North American market.
"Australia's capacity to supply fine wool tops at competitive prices
constitutes a key element of the strategy to be implemented by the Mexican
textile and apparel industry to meet market demand.
"Accordingly, Mexico has been singled out as a priority market for
the development of Australian wool exports by the Australian Trade and Investment
Packages (ATIP) Ministerial Council."
Chaired by Senators McMullan and Collins, the ATIP Council is a government/industry
body designed to assist Australia's wool exports.
The positive outcome in Mexico can be attributed to a cooperative effort
by the Australian Government, the International Wool Secretariat, and the
Australian wool processing industry.
Further information:
Senator Collins' office: Brian Johnstone, (06) 277 7520
Senator McMullan's office: John Flannery, (06) 277 7420
JOINT STATEMENT
Minister for Trade, Senator Bob McMullan
Minister for Primary Industries and Energy, Senator Bob Collins