Market access hot topic of MLA’s summer of European activities

08 August 2017

Australian beef and lamb may not be shipped to Europe in huge volumes but that is overcome by value.

Europe consistently ranks as Australia’s highest value beef export market on a per kilogram basis - reaching $13.43/kg last year – almost double the global average. With the commencement of Australia – EU Free Trade Agreement negotiations edging closer there are some exciting market access opportunities on the horizon. 

Market access remains our number one priority in Europe and we have been working hard to put the spotlight on the Australian red meat industry in the EU and UK to ensure our priorities are heard.

EU trade talks edge closer

Australia - EU free trade agreement (FTA) momentum increased recently with advocacy by high level visitors to the market – including Australia’s Deputy Prime Minister Barnaby Joyce, Australian Finance Minister Mathias Cormann and Simon Crean, who chairs the European Australian Business Council (EABC) as well as a delegation from the Sheepmeat Council of Australia (SCA).

At a producer level, SCA representatives compared notes with their European counterparts on the common supply and trading challenges they face especially in the context of the UK exiting the EU.

The group attended the Royal Highland Show in Edinburgh to meet farmer lobby groups including the National Farmers Union, Quality Meat Scotland, the National Sheep Association, members of the European Parliament in Brussels and a number of Australian meat importers.

This producer-to-producer engagement is a vital part of cross-industry collaboration to establish a successful trading relationship for the future.

An unprecedented event like Brexit will no doubt have effects on all countries producing and supplying meat for EU and UK consumers. SCA and the National Farmers Union agreed their respective industries must all work together to achieve mutually beneficial outcomes.

FTA progress report: The European Commission will table a draft FTA mandate after the European summer (estimated late September). Member states then vote on the mandate before negotiating directives are adopted. This paves the way for FTA negotiations to officially launch (estimated November) followed by the first round of negotiations (estimated early 2018).

There are 28 (soon to be 27) member states and 751 individual representatives across the European parliament and each country has their own differing views on Australia as a trading partner.

In our advocacy it is important to cast the net widely, as all 27 countries will have input in ratifying the outcome of any trade deal with Australia.

Brexit beckons

The UK has traditionally always been an important destination for Australian red meat exports. The biggest risk from Brexit is that Australia loses access to a high value market and an important historical trading partner.

For example, in1959 prior to the UK joining the EU, Australia supplied roughly 153,000 tonnes of beef to the UK (67% of all UK’s beef imports at that time), and this is a similar size to the Korean market for Australian beef today.

The first round of negotiations between the EU and UK began in July. Both sides are discussing big ticket items like citizens’ rights, the UK’s financial bill, the Northern Ireland border and the thorny issue of post-Brexit trade rules.

Home grown agriculture and the need for imported food to keep the population fed is another sensitive area of negotiations. Australian red meat exporters will be interested in the issue of tariff rate quotas (TRQs). The EU has 124 TRQs which specify the quantity of products it allows its trading partners, such as Australia, to import every year. Quotas are divided up and allotted to exporters country by country. Australia’s access through these quotas is extremely restricted. Current access is comprised of 7,150 tonne quota for beef and 19,186 tonne combined quota for sheep and goatmeat. The Australian red meat industry can ill afford to see any reduction to this access to the EU as a result of Brexit. 

Through the Brexit process, the UK must also establish a trading regime that will allow access to other supplying countries.

We are monitoring the UK’s position on this closely and urging the UK to establish a fair system that allows their consumers to be able to access high quality Australian beef, sheepmeat and goatmeat.

MLA’s annual Brussels BBQ

The recent advocacy visits coincided with MLA’s third annual Australian beef and lamb barbecue, held in Brussels where MLA executive chef Sam Burke wowed crowds by cooking a bbq feast for 600 guests.

Attendees, which included members of the European Parliament, trade and agricultural counsellors, Australian embassy officials, European industry bodies and importers of Australian red meat, all sampled gourmet barbecued beef and lamb dishes. We have worked hard to build this network of contacts in Europe who support greater trade with Australia. The support shown at our event is a true reflection of our industry’s ongoing involvement in the market.

Similarly, MLA supported the Australian permanent mission to the World Trade Organisation (WTO) to host a barbecue for diplomats, country ambassadors and embassy officials in Geneva in June.  With Sam Burke serving up Australian lamb chops and tender grassfed beef steaks to the 70 plus guests. The event was an opportunity to discuss Australia’s red meat market access priorities and reinforce the importance of ongoing trade reform to improve Australia’s international trade opportunities.

More information

Josh Anderson
MLA International Business Manager – Europe and Russia

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