Australia’s efforts to export more meat to Britain when the UK exits the European Union are coinciding with free trade talks due to start between Australia and the EU in coming months.
While a trade deal with affluent Europe would take maybe five or six years, or more, to complete, it also would be “absolutely critical for Australia”, given our position as a high cost meat producer, said Meat and Livestock Australia’s (MLA) managing director Richard Norton.
Although new markets in Asia, including China and Vietnam, had swiftly become a valuable export destinations for our red meat, the significance of Britain and mainland Europe as a high end market could not be underestimated.
Despite not yet buying more than about 37,000 tonnes of red meat, the EU bloc is Australia’s largest source of foreign investment and our second largest trading partner.
In 2015-16, the EU’s foreign direct investment in Australia was worth $157.6 billion, while two-way merchandise and services trade between Australia and the EU (including Britain) totalled $95.6b.
MLA also ranks the EU as Australia’s highest value beef export market on a per tonne basis – $13,430/t in 2016, or almost double the global average price.
“We’re getting a reduced share of the total Asian market because countries like China are taking more commodity product from South America or India,” Mr Norton said.
“We need markets which want the sort of high quality (higher priced) product we’ve already proven we can supply with confidence.”
“China has 8 million people earning more than $US35,000 a year, but the EU has 180m earning more than $US35,000.
The process towards an Australia-EU free trade agreement (FTA) began back in late 2015.
Officials recently completed a joint FTA scoping exercise, and according to the Department of Foreign Affairs and Trade (DFAT) both sides are working toward a launch of formal negotiations.
As part of the next stage DFAT is seeking submissions from interested stakeholders who would potentially gain from scaling back trade barriers, including Australian export quotas and tariffs, expanded services and investment ties and enhanced business regulatory co-operation.
However, FTAs have become a sticking point with some EU countries, with the deal between Canada and the union almost failing to go through at the last minute when it was vetoed by the tiny regional government in Belgium last year.
Australia’s anti-dumping action against Italian tinned tomatoes last year also stirred Italian suspicions about the planned Australia-EU deal.
Mr Norton noted MLA’s current priority on lobbying for fairer red meat access into UK markets was not about pursuing one market over another.
His industry was simply “proactively meeting the expected new political time frames triggered by the early UK election” and the ongoing Brexit agenda.
“Equally, our industry and government must also maintain a steely focus on negotiating a free trade agreement with the EU,” he said.
“We want these relationships to prosper and that can only happen when Australia is afforded equal opportunity in what is a very competitive market.”