CHINA and Australia officially reached agreement this morning over greatly improved market access for Australian chilled and frozen beef and sheepmeat, expanded trade in offals and a new trade in live sheep and goat exports.

The widely-anticipated agreement (see Beef Central’s story on Monday) came as part of Chinese Premier Li Keqiang’s official visit to Australia this week, and ends a three-year industry and government crusade to improve trade terms for red meat.

Chinese Premier Li Keqiang addresses this morning’s official signing and press conference in Canberra

The red meat access relaxations came as part of a joint statement on enhancing inspection and quarantine cooperation between Australia and the People’s Republic.

The agreement is estimated to be worth $400 million per year for Australia’s meat industry, and will help underpin jobs in regional areas, where most meat processing establishments operate. Australia remains the only supplier country with chilled access.

Chilled and frozen market access to China frequently appears among the priorities in lists of non-tariff trade barriers hampering Australian red meat export trade. Collectively, the 130 issues identified by AMIC are said to cost the industry $3.4 billion each year.

Deputy prime minister Barnaby Joyce said the deal announced this morning would expand and improve Australia’s meat market access by allowing more meat and live animal exporters access to China and progressing new trade opportunities. He said the agreement could lead to significantly improved farmgate returns across the nation.

Potential access for 93 beef, sheep plants and cold stores

Today’s joint statement will unlock a number of trade restrictions currently in place to support Australian meat and livestock exports. Key features of the agreement for the red meat industry include:

• Currently, out of the 47 integrated establishments approved for China, only 11 are approved for export of chilled beef, and one for sheepmeat. Through the signing of the agreement, all 47 are now approved for fresh red meat. An additional 23 registered cold stores will also be approved for fresh red meat, taking the total number of Australian meat processors able to export chilled fresh meat into China from 11, to 70. That number is set to grow further, with the fast-track approval for another 15 establishments that were audited in 2015, with the potential for eight new applications. Part of the reason for China’s previously tight restrictions on chilled access are explained in this earlier article.
• Expanding Australia’s access for offal products from beef, sheepmeat and goatmeat registered plants to China,
• Initiating trade in donkey meat and edible skins; and
• Promoting a protocol for the export of Australian slaughter sheep and goats.

“This is a huge achievement and means Australia could potentially have 93 red meat plants with Chinese access,” the Australian Meat Industry Council said this morning.

“When this is put into the context of having 160 processes in Australia, this is close to 60 percent, which is a huge jump,” AMIC said.

Prime minister Malcolm Turnbull address this morning’s official agreement gathering at Parliament House

China is already Australia’s largest sheep meat market, worth $240 million in 2016, and its fourth largest beef market, growing from less than $100m in value in 2011 to $670m last year.

“Together Australia and China are focused on promoting food security and safety and ensuring continued access to safe, high quality and reliable produce,” Mr Joyce said.

As Beef Central anticipated on Monday, separate agreements were also reached on salmon exports processed in China and exported to Australia, live sheep trade, and a new market for donkey meat exports.

Trade minister Steven Ciobo said increasing the number of China-eligible meat processing establishments would create more export opportunities for red meat trade with China.

“Today’s agreement will enable Australian beef producers to continue meeting China’s growing demand for high-quality beef,” he said.  “This, alongside continued cuts under ChAFTA to the tariffs Australian beef faces in China, will bring further significant benefits for regional Australia and employment in the red meat industry.”

The agreement was a significant opportunity to increase the growth of the industry in regional Australia, leading to more jobs. The majority of meat production and processing facilities are located in regional areas, so this will have a flow-on effect also to suppliers for these businesses including equipment, feed stock, infrastructure and transport, the government said.

• Industry reaction article will be posted on Beef Central shortly….