ABA chairman, Brad Bellinger, says the decision shows a vote of no confidence in the scheme.

"These two governments recognise the huge costs on the production section that NLIS imposes," Mr Bellinger said.

"Clearly this huge cost is one which Australian Governments, both Federal and State, either do not understand, or do not care about and conveniently forget that the National Livestock Identification System (NLIS) has not sold one more kilogram of beef."

Mr Bellinger says Australia's trade negotiators at the Doha Round of the World Trade Organisation have been relentlessly critical of the level of subsidies that the USA and European farmers receive.

"Now these countries must look on in amazement at why Australian Governments are prepared to burden their farmers with even higher regulatory production costs such as NLIS, further eroding their profitability," he said.

"Rather than NLIS giving us a marketing advantage in the world beef trade it is actually reducing our biosecurity and weakening our competitive edge, as our competitors abandon this ridiculous scheme."