Successful free trade deals with the European Union and Great Britain after Brexit have the potential to open up the lucrative European market for premium Australian beef and lamb.
Australia and the EU launched negotiations for a free trade agreement on June 18 this year.
The Federal Government will also seek a bilateral trade deal with Great Britain once it exits the EU, scheduled for next March.
A potential spanner was recently tossed into the works with news the US has the green light to negotiate changes to the EU’s quota for grain non-hormone growth promotant beef, known as 481 quota, which allows up to 45,000 tonnes without tariffs.
This quota is currently filled by the US, Australia, NZ, Uruguay and Argentina on a first-come, first-served basis.
In the past financial year the 481 quota accounted for three quarters of Australia’s EU beef exports, worth $250m.
Those heading up EU relations within Australia’s beef industry have played down market reports the US will be handed a guaranteed slice of as much as 35,000t. But EU diplomats have told Australia unless a deal is done with the US the whole 481 quota could be scrapped.
Australia’s other beef EU regime, the Hilton deal, comes with a 20 per cent in-quota duty and is limited to 7150t.
Meat and Livestock Australia’s business manager in Europe, Josh Anderson, said the long-term solution for Australia’s red meat access to the EU would be through a FTA with the bloc.
He said a new 481 quota deal for the US was “not a done deal, by any means” and any changes to the existing quota would not happen overnight.
In the 12 months ending September Australia exported 16,073 tonnes of beef to the EU, a year-on-year drop of 11pc. The bulk was chilled primals (notably striploins, rumps and topsides) headed mainly for the foodservice sector.
During the same period Australia exported 4780 tonnes of beef to Britain and again the trade was dominated by chilled product.
The Netherlands is the biggest buyer of Australian beef (45pc) followed by the UK (34pc). Our biggest export competitors in the EU are Brazil, Argentina and Uruguay.
During the EU FTA negotiations Australia will be striving to either remove or significantly reduce the EU’s punitive import regime.
The playing field in the EU is even more tilted against Australian sheepmeat exporters.
Australia has a 19,186 tonne country specific duty-free sheepmeat/goatmeat export quota to the EU.
In contrast, NZ has a sheepmeat quota of 228,254 tonnes, more than 11 times higher than Australia’s. NZ’s quota has been under-utilised in recent years because of the country’s switch into dairying.
In the year ended September Australia shipped 15,672 tonnes of sheepmeat into the EU including 10,583 tonnes of chilled (3945t) and frozen (6638t) lamb and 5089 tonnes of frozen mutton.
Those exports included 9720 tonnes of sheepmeat to the UK made up of 5910 tonnes of lamb and 3810 tonnes of mutton, making it by far Australia’s largest market in the EU. France takes around 11pc of our exports.
Our trade negotiators post-Brexit will be keen to shore up Australia’s sheepmeat exports to Britain.
Sheepmeat consumption in the EU is minor compared with pork, poultry and beef but Europe’s rising sheepmeat-loving moslem population will increase demand.
