AUSTRALIA’S beef industry should keep its eye on the end game in relation to trade access to the European Union, its highest value market on a per kilogram basis, international red meat market experts say.
As angst grows about the possibility the EU may give the United States a large, country-specific portion of the tariff-free grainfed quota, Meat and Livestock Australia’s business manager in Europe says the longer-term solution for Australia’s red meat access to the EU would be through a Free Trade Agreement with the bloc.
The EU and the US now have the green light to negotiate changes to the quota, known as 481, which allows up to 45,000 tonnes of non-hormone beef in without tariffs and is currently filled by the US, Australia, New Zealand, 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 is about to be handed a guaranteed slice of as much as 35,000t.
MLA’s Josh Anderson said it was “not a done deal, by any means.”
Any changes to the existing quota would not happen overnight, he said.
There was a substantial, lengthy process required to make any changes, particularly on the EU side, not to mention the process required for World Trade Organisation compliance.
Indeed, it is the WTO angle Australian producers want to work hard to protect their access, with Cattle Council of Australia pushing for the EU to be held to rules that any change to the quota be signed off on by other substantial suppliers.
However, Mr Anderson said Australia actually had very limited rights.
While we must, as a substantial supplier, legally be a part of the consultation process, it would remain a closed discussion between the US and the EU, he said.
Mr Anderson’s belief is the ongoing Australia-EU FTA discussions provide a valuable lever for negotiating future preferential beef access.
“If we jeopardise long-term gains for short-term pain - that is retaliatory trade measures - it will not be advantageous for our industry in any way,” he said.
“The other risk we have always faced is that either the US or the EU can unilaterally withdraw from the agreement on the basis of six months’ notice. We must be prepared for the possibility where the US walks away altogether and the quota is dissolved.
“Our government has committed to achieving significant access gains for Australian beef into the EU and industry must respect the realistic pathway available in which to secure such gains for the long-term benefit of all suppliers involved.”