LAST Thursday the European Union and New Zealand completed negotiations for a free trade agreement.
European Commission president Ursula von der Leyen made the announcement after a meeting in Brussels with NZ Prime Minister Jacinda Ardern.
As reported in this column a month ago, EU officials flagged their intent back in May to reactivate a number of stalled deals.
This development stemmed from two main drivers: a need to reinforce strategic alliances as a consequence of Russia's invasion of Ukraine and transition of EU presidency on July 1 from reticent France to the more trade-oriented Czech Republic.
While France has steadfastly opposed the South American Mercosur deal due to Amazon rainforest issues, it was simply pragmatic politics that drove French President Emmanuel Macron to halt progression of the Mexico deal early in 2022 on taking up the revolving EU presidency. He was concerned that 20,000 tonnes of beef imports in that deal was likely to spark farm protests and disturb French presidential and legislative elections in April and June.
Similarly there was electoral advantage to be gained from playing the submarine contract affair and stalling the Australia trade deal.
But now with President Macron re-elected and relations with Australia reset with new Australian Prime Minister Anthony Albanese, the way would seem clear for negotiations to proceed to hopefully a favourable conclusion for Australia in its deal with the EU.
But if the outcome for beef and associated trade-offs in the NZ deal is anything to go by, the task ahead for Australia is not going to be easy.
Specifically NZ won 10,000t carcase weight equivalent of new beef quota with 3333t in year one and the balance increasing linearly through to year seven at an in-quota tariff rate of 7.5pc.
Also NZ's existing high quality beef (Hilton) quota of 846t will see a decrease of the in-quota tariff rate from 20pc to 7.5pc.
The NZ meat industry was underwhelmed.
Meat Industry Association chief executive Sirma Karapeeva said, "We are extremely disappointed that this agreement does not deliver commercially meaningful access for our exporters."
Beef + Lamb New Zealand chief executive Sam McIvor said that the outcome was difficult to reconcile given the longstanding relationship and shared values between the EU and NZ.
"For over 100 years, our sector has exported safe, nutritious, and high-quality products to Europe. We share common societal values, a commitment to high production standards and robust regulatory frameworks for food safety and quality, animal welfare, and sustainability. It's difficult to understand why a more ambitious outcome wasn't possible."
But if NZ was not pleased with what it considered to be a miserably small beef quota allocation, there were many on the EU side according to media site, Stuff, who were equally discontent that NZ got as much as it did.
According to Stuff, NZ Trade Minister Damien O'Connor had been in Brussels all week unable to reach agreement until Ardern arrived.
The last minute horse trading came down to a couple of imperatives from EU perspective and agreement by NZ on two issues that may well have serious future ramifications.
Firstly it was important that the EU progress the many deals in train and secondly and increasingly that those deals are 'green deals'.
Ardern seized on the clean and green cachet carried by Brand New Zealand.
If the EU wants to sign a 'green deal' she argued, who is there other than NZ?
But being seen to be green was not enough as apparently the deal provides for sanctionable commitments to the Paris Climate Accord. What these commitments represent is not clear as the full technical details of the deal are still to be released.
The other issue that seemingly got the deal over the line was Ardern agreeing to Geographic Indicator rules.
Various countries within the EU have named products that have a specific geographical origin and possess qualities or a reputation that are attributable to that origin.
In short, NZ at some future point under the deal will be unable to use these specific European names for NZ product.
The clear message from the NZ deal is that EU trade deals are increasingly being tied to European protectionism and green idealism.
It seems equally clear that beef quota volume is unlikely to become more generous.
The question this poses for Australia is whether a trade deal with the EU is a worthwhile goal.
Good rain, minor impact on kills
GOOD rain in Central Queensland and further north will almost certainly result in some lost time with Biloela likely to drop two days and possibly one day at other central and northern sheds.
In the south of the state, influenza is now causing a lot of absenteeism after COVID returned with a vengeance at a major central plant. Kill numbers are affected but generally no days have been lost.
July seems well placed for cattle and in some instances space bookings are already out into August.
Rates remain unchanged with the majors holding 750-755c/kg for 4-tooth ox and 690-695 for heavy cow.
On the sales front one major exporter described current trading conditions as a bloodbath.
Driven partly by drought, the US has an abundance of meat at present and Australian sales desks are struggling against heavy unloading of US product particularly into Japan and Korea.
The Australian domestic market has also become harder as consumers trade down from cuts to mince and sausages in an attempt to counter rises in interest rates, fuel and energy. Noticeable that some processors are adjusting operations to accommodate this trend.
The lean-beef export market remains a challenge as noted by Steiner in their latest update.
End users in the US are drawing down inventories resulting in a softer market tone with New Zealand, Mexico, Central America, Brazil and Australia all competing for what trade there is.
Indicator 90CL eased 1c/lb to US279c/lb FOB East Coast on light trade.
Sign up for our newsletter to stay up to date.