Australian red meat’s prospects of achieving a ‘comprehensive and meaningful’ Free Trade Agreement with the United Kingdom came under scrutiny during Senate Estimates in Canberra yesterday.

In the countdown to a decision in coming weeks over the agreement, several senators quizzed Meat & Livestock Australia managing director Jason Strong over future trade prospects.

National senator Perin Davey asked what a successful Australia-UK Free Trade Agreement would mean for Australian red meat exports to the UK.

“The European market (including the UK) is a very important one for Australian beef and lamb,” Mr Strong said.

“But any increase in exports will absolutely depend on where the FTA result lands.”

“We can go back to the 1970s when the UK was one of our largest markets. In more recent years, under the EU umbrella, as we were able to get more and better access to that market, the Australian industry responded. The best example of that we have is the tariff-free grainfed beef quota, which our industry responded very positively to – doubling beef exports to Europe and the UK in a very short period of time.”

To put that into context, Mr Strong said this was still only about 20,000 tonnes a year, at its peak.

“But it’s a great opportunity, because it is one of the highest value markets we have – and consistently has been.”

“We have a product which is in demand for that market, and we can fit in very well with their domestic production, being complementary in terms of production cycles.”

Asked whether MLA would undertake marketing effort in the UK to assist in growing exports, Mr Strong said once the FTA process was passed (hopefully, successfully), Australia would ‘absolutely’ support the market in this way.

“But in the first instance, it would be in the context of business development activity supporting the exporters and importers in that market, which has been one of the most effective ways we manage our product in international markets, at this stage.”

“We have experience doing that previously, as an industry – and MLA has been part of that – and we’d be able to pick that up very quickly, in the event of the completion of an FTA with the UK.

Asked if there had been any non-trade barriers identified in the lead up to access negotiations with the UK, Mr Strong said Australia faced a ‘long list’ of non-tariff trade barriers around the world, which challenged Australian beef and sheepmeat exports across a whole range of markets.

“That is one of the areas we focus on, as far as our R&D is concerned, when we look at investment in market access – its things like the FTA, but the non-tariff trade barriers amount to nearly $4 billion across all of our 100 export markets are concerned.”

“But there are areas where we have made progress. There’s been press over the past six months about progress in the Middle East, in negotiations with authorities in a number of customer countries over shelf-life requirements over chilled beef and lamb. This allows exporters to trade in sea-freight rather than air freight, creating a benefit worth around $100 million per year to the trade,” he said.

“But the non-tariff trade barriers across many of our markets remain quite significant, and it’s an area that we as an industry continue to invest in.”

Responding to UK FTA questions from Sen Bridget McKenzie, Mr Strong said even when volumes had been reasonably low for red meat into the EU and the UK, the value of that meat on a per tonne basis had been very high, making it a ‘very exciting’ market.

“The industry has been very committed to the process of working with the government and the department to get the best possible results from the FTA discussions,” he said.

Politically motivated criticisms

Sen McKenzie pointed to ‘commentary’ in Britain and from an individual Australian Greens senator earlier this week, alleging a lack of animal welfare standards in the Australian beef industry, poor practices and lack of commitment to sustainable land management.

“How much of this is UK farmers and others playing hardball during the current FTA negotiation to protect their own interests, and how much is based on fact?” she asked.

“I’d want to say all of it (is politically motivated), but certainly most of it,” Mr Strong said.

“The secretary’s statement yesterday about the OIE assessment of Australia’s animal welfare standards is the appropriate, objective view. Australia exports to more than 100 markets around the world. We have to jump through the hoops for everybody in the world who has any standard around quality, safety, security or integrity of our supply.

“The Australian red meat sector is an export industry. This is what we do, and we do it incredibly well. There will be posturing, and statements, but our industry is doing an incredibly good job of being disciplined, and not entering into some of those arguments and claims, which are appropriately left to DFAT and the trade negotiators.”

“What we can do is keep talking about how positive our global reputation is, and the commitment we have to supplying the highest quality, beef and lamb around the world.”

Non-tariff trade barriers could take a range of forms, Sen McKenzie said.

“Are such claims like those made this week the 21^st century’s version of non-tariff trade barriers?” she asked.

“It’s part of it,” Mr Strong said.

“Those things which are outside of what can be seen or established as a standard approach to a trade agreement do fall into that category.”

Asked how the beef industry had been able to diversify markets, and where the next tranche of opportunities might lie, Mr Strong told Sen McKenzie that the good thing about the red meat sector was that it had had a diversified approach to global markets for a long time.

“We’ve had to respond to shifts in individual markets for a whole range of reasons. There have been challenges in the past in the US and Japan. We may forget that not very many years ago, Russia was a 50,000t market for Australian beef, but when it ‘stopped being that,’ Australia was able to shift very quickly, with very minimal disruption, because of its diversified approach across nearly 100 markets.

“The industry is very good at that. When an opportunity in the EU or the UK comes along, then a high-value market that we get additional access to, is something that we very sensibly then respond to. The local concerns in those markets about the amount we produce, the volume of beef we have, and the potential impact on their markets is certainly unfounded, because there is no evidence of Australia doing anything like that (flooding a market) anywhere in the world.

“We have the type of relationships we want to build with them, already established in those other markets, so we will approach it in a very sensible, structured, collaborative way, like we have for every other free trade agreement.”