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1 Representatives of the Australian Meat and Livestock Corporation(AMLC), the Australian Commerce and Industry Office (ACTO) andthe Council of Agriculture (COA), Board of Foreign Trade and ot-her relevant agencies met in Taipei on 12 September 1991 to dis-cuss the issue of access for Australian beef to the Taiwan mark-et.Both sides noted that imports of Australian shin/shank, thin fl-ank, brisket and intercostal beef (hereafter referred to as shi-nshank) had averaged approximately 1,000 tonnes per month for t-he first 8 months of 1991 which is less than for the same periodin 1990. If shipments continued at this rate, total imports for the whole of 1991 would be approximately 12,000 tonnes. Both sides noted the rising prices for domestic live beef cattleand agreed on measures to be taken if these prices fell substan-tially.Both sides agreed that no action would be required if the on fa-rm price for live beef cattle remained at NT$85/kg or above.Both sides agreed that if the on-farm price for live beef cattlefell from a base price of NT$85/kg or less by 10% or more in onemonth, or a total of 10% or more over three consecutive month,the COA and relevant agencies would investigate the cause of thefall. ACTO would be available for consultation or to provide fu-rther information during this time as appropriate.If the COA found clear evidence that the level or price of shin-shank imports from Australia was the major cause of such a fallin prices, it would provide a written report to ACIO of its fin-dings. Consultations with the AMLC would take place within 14 d-ays of the delivery of the report to ACIO.If during these consultations, both sides agreed that the fallin prices was directly attributable to the level or price of sh-in\shank imported from Australia, then the AMLC would take appr-opriate action to achieve an upturn in domestic beef cattle pri-ces within 3 months of the date of the consultations.Bothe sides would remain in close contact during this three mon-th period to monitor the efficacy of the measures taken by the AMLC and on-going developments in the market. The on-farm live cattle price referred to in this understandingwill be based on the average prices paid by the regional beef c-ooperatives to farmers and notified to COA. COA will provide th-ese prices to ACIO on a fortnightly basis.The measures outlined in this understanding are transitional innature and will conclude on 31 December 1992 at the end of theCOA's 3-year adjustment plan for the domestic beef industry.[Signed]Date: Sep. 12,1991Spencer S.C. ChyrDirectorAnimal Industry DepartmentCouncil of Agriculture[Signed]Date: Sep. 12,1991Bruce StandenManaging Director Australian Meat andLivestock CorporationWitnessed by:[Signed]Date: Sep. 12,1991Yi-fu LinDeputy DirectorBoard of Foreign TradeMinistry of Economic Affairs[Signed]Date: Sep. 12,1991Robert J O'DonovanRepresentativeAustralian Commerceand Industry Office*****************************************September 25,1991 Dr. Bruce J. StandenManaging Director Australian Meat andLivestock CorporationAetna Life TowerHyde Park SquareBox 4129 G.P.O.Sydney 2001Australia Dear Dr. Standen:Pursuant to the beef consultation in Taipei on 12 September 1991and based on our mutual understanding, I would like to reiterateour positions which I have stated at discussion that if the AML-C's measures fail to achieve an upturn in domestic beef priceswithin three months from the date of consultations, then as youaware, our side will take further actions to upturn the domesticcattle price. As we have agreed before signing the Letter of Understanding Be-tween the Australian Meat and Livestock Corporation and Council of Agriculture, that the exchange of this letter will constituteas a supplementary document of our agreement. I take this opportunity to renew to you the assurances of my hi-ghest consideration.With best regards,Sincerely yours, [Signed] SpencerS.C. Chyr Director Animal Industry Department cc: Australian Commerce and IndustryOffce, Taipei Office Ministry of Foreign Affairs Ministry of Finance Board of Foreign Trade, MOEA *************************************23 October, 1991 Dr. Spencer S.C. ChyrDirectorAnimal Industry DepartmentCouncil of Agriculture37 Nanhai RoadTAIPEI, TAIWAN, 10728 Dear Dr. Chyr,Thank you for your letter of 25 September, 1991.During the talks between AMLC and COA in Taipei on 12 September,1991, both sides agreed on measures to be taken if domestic livebeef cattle prices fell substantially.I would like to confirm the AMLC's commitment to the full and f-aithful implementation of the Letter of Understanding we signedat the conclusion of those talks.In summary, if during consultations COA and AMLC agreed that asubstantial fall in the on-farm price for live beef cattle (onthe basis of a set formula) was directly attributable to the le-vel or price of shin/shank beef imported from Australia, AMlC u-ndertook to take appropriate action to achieve an upturn in dom-estic beef cattle prices within 3 months of the date of the con-sultations.Although our underaking is clearly made in the Letter of Unders-tanding between both sides, in a spirit of understanding and co-operation AMLC re-iterates and confirms our undertaking that ap-propriate action will be taken should the above circumstances o-ccur.I have noted your re-statement of the position that the Taiwanside reserves the right to take unilateral action under certaincircumstances. As stated during our discussions, I am confidentthat any remedial action taken by the AMLC pursuant to the Lett-er of Understanding would be effective and that the question offurther action by the COA will not therefore arise.I look forward to fruitful co-operation with the COA in the imp-lementation of the understanding over the coming months.Yours sincerely, [Signed] B.J. STANDEN MANAGING DIRECTOR