![Wagga Wagga district beef producer and Cattle Council of Australia director Mark Greening with Member of the European Parliament Derek Vaughan, Wales, and Meat and Livestock Australia's Europe and Russia business manager Josh Anderson. Wagga Wagga district beef producer and Cattle Council of Australia director Mark Greening with Member of the European Parliament Derek Vaughan, Wales, and Meat and Livestock Australia's Europe and Russia business manager Josh Anderson.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/b1bc1afe-5b76-4930-829d-4c27895eac53.jpg/r0_0_4722_2665_w1200_h678_fmax.jpg)
AUSTRALIA’S beef industry has plenty to entice European farmers to the free trade negotiations table with, not-the-least it’s world-leading research, data collection and analysis and the way that is fed back into farming systems to boost profitability.
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Then there is the potential for Australia to pave the way for lucrative South East Asian doors to open to the European Union, particularly those in China.
United Kingdom Member of the European Parliament Derek Vaughan provided this assessment following visits to beef properties and cattle sales and meetings with industry groups and government officials in Australia this week.
A strong supporter of free trade agreements with Australia and New Zealand, he voted in February to open FTA negotiations, saying the two countries represented an important market for EU nations but were also vital international partners across a range of issues.
Hosted by Meat and Livestock Australia, his trip was largely about gathering the information necessary to alleviate the concerns of European farmers over what Australian agriculture’s increased access to the EU might mean for them.
His message was it was definitely in the interests of Australian beef producers to continue to focus on negotiations with the EU but they should take a patient approach.
EU-Aus FTA talks are on track to start in earnest mid next year but Mr Vaughan warned we should not expect anything to be signed for at least another two years after that.
“FTAs are not easy to achieve - there are always lots of vested interests,” he said.
No more so than the EU, which has a multitude of regional governments along with member states and, importantly the European Parliament, to bring to agreement.
The just-signed EU-Canada FTA, which provides for duty-free trade between the two for 98 per cent of industrial products and offers agricultural producers additional market access, was seven years in the making.
The EU is Australia’s highest value beef large export market on a per tonne basis, with shipments averaging $12,610/t last year. Total beef exports were valued at $279m.
The vast majority of Australian beef and veal exports to the EU are shipped under two major fiscal year quotas: the HQB Hilton and HQB grainfed. Australia’s share of the first is 7,150t shipping weight/year and has a 20 per cent in-quota duty.
According to MLA market analysts, Australian beef is well positioned to capitalise on European consumers’ improving discretionary spending power.
Because 65pc of beef production in the EU is a result of dairy, so is therefore a lower quality byproduct, our high end product targets a largely unmet, and growing, need.
Thus the strong interest in getting free trade talks underway.
Mr Vaughan said beef farmers in the EU were concerned about red meat being imported to their detriment - specifically an increased quantity coming in which might undermine prices.
His meetings in Australia revealed a “level of research in agriculture that is very high.”
“There are things EU farmers could learn from Australia to make them more competitive - that’s a big incentive for free trade negotiations,” he said.
“Also, EU farmers haven’t got access to many markets in South East Asia and China and so perhaps Australia can be a gateway into those markets for them.”
The EU was “negotiating all the time” in regards to free trade and there were other countries in line ahead of Australia, he acknowledged.
“Australia and New Zealand negotiations will be launched together, which I believe will be beneficial,” he said.
“But these things do take time.”
Mr Vaughan, a member of the Socials and Democrats, said he encountered strong interest - excitement even - from Australian farmers about the possibilities presented by Brexit.
The UK is the primary destination for Australian exports to the EU, accounting for 40pc last year.
Australian beef exporters believe the potential arising from the UK leaving the union in 2019 is substantial, given the Brits are a nation of beef eaters yet only produce a portion of what they consume.
Mr Vaughan said he has attempted to water down expectations.
“At this stage, it’s only mid 2019 that formal negotiations direct with the UK can even begin and after that it will take some time to finalise,” he said.
“Once again, be patient.”
Mr Vaughan said rather than turn to beef to subsidise dairy operations currently struggling with below break-even prices, European farmers were more likely to look for government support.
Subsidies were possibly the most striking difference between the two beef industries.
In Wales, the average farmer was subsidised to the equivalent of A$30,000 a year, he said.