After an almost two-year break, Australia and the European Union are looking to get trade deal negotiations going again. Talks broke down in October 2023, the big issue being that the EU wouldn’t give Australia the level of beef and sheepmeat access that they considered sufficient. Australia’s Counsellor Peter Creaser from the Australian Mission to the European Union spoke to the Irish Farmers Journal this week about why an EU-Australia trade deal would be good for both, and why farmers need not be concerned.

Counsellor Creaser is of the view that “a free trade agreement with Europe is a really good signal to the rest of the world that countries that do support a global rules-based trading system can work well together”.

This he believes is important at present given the level of geopolitical tensions and the disruptions that are taking place. He says that for Australia the EU is “a very logical partner in that global rules based trading space”.

Beef and sheepmeat access

As Figure 1 shows, Australia is a major global exporter of both beef and sheepmeat. It is in fact the world’s largest sheepmeat exporter and second only to Brazil in 2024 for beef exports.

Its main export markets are the United States and neighbouring Asian countries, particularly China, Japan and South Korea.

Europe has been a relatively small export market for beef and sheepmeat though, as Figure 2 and Figure 3 show, volumes to the UK have been increasing, particularly since the Australia-UK trade agreement came into effect in the middle of 2023.

A trade agreement with the EU came close to being finalised in June 2023, but failed to get over the line, as did a further attempt in the margins of a G7 trade ministers meeting in October that year.

New Zealand Canada benchmark

Now the EU and Australia are trying again to close the deal. However, the issues that were a problem two years ago haven’t changed, even if, as Counsellor Creaser pointed out, the global circumstances have. He told the Irish Farmers Journal that “the primary thing that we’re looking for is actually a reasonable quota for beef and sheepmeat”.

When asked what he believed a reasonable quota was, Counsellor Creaser replied: “When we look at some of the other free trade agreements, New Zealand, Canada for example, you look at countries that are similar size to us. We’re looking in that ballpark, something that sits in that space.”

The EU-Canada deal came into effect in 2017 and the New Zealand deal came into effect in May 2024. Canada is a negligible sheepmeat exporter, but is a major beef exporter and secured a preferential 50,000t beef quota for access to the EU split between 35,000t fresh and 15,000t frozen beef. New Zealand is the world’s second largest sheepmeat exporter and secured an additional 38,000t tariff-free quota to be phased in over seven years.

This was in addition to the historic quota carried over from UK membership of the EU. Access was agreed for 10,000t of New Zealand beef, phased in over seven years at a 7.5% tariff. There are also significant quotas for dairy products.

Terms and conditions

Counsellor Creaser also spoke of the terms and conditions saying that “there’s the quota, the number, but then it’s also the conditions that are attached to it”. He explained that attached “conditions can make a big difference to the actual trade being commercially meaningful” and it was important that these conditions weren’t unreasonable. He wasn’t specific as to what these were beyond referring to the product being split into fresh and frozen, grain-fed and grass-fed in the case of beef.

It has been practice in EU trade deals that quota is phased in over a period of time, typically seven years. Also in the Mercosur deal, there is a safeguard clause that enables the EU apply a brake on imports if they are causing a disruption in the market or there is oversupply. Counsellor Creaser was adamant that if agreement is reached that “the quota and given how it will be structured, it would be, you know, miniscule in terms of the overall EU market” and there was no risk of the market being flooded.

Hormones

Growth-promoting hormones are banned in EU beef production, but widely used by other major beef-producing countries, including Australia.

Counsellor Creaser recognised this and said while Australia’s policy is to “follow the science” the country readily agrees to meeting EU requirements for all beef imports.

Following our interview, he shared a document explaining in detail how beef exported to the EU is from cattle that demonstrate they are hormone free under the EU Cattle Accreditation Scheme.

Comment

Australia is a high-value market and attractive for a wide range of EU exporters. The country has its own list of requirements for the EU to gain unfetttered access to its consumers.

While it is clear that it doesn’t expect a similar quota to Mercosur, the country’s negotiators have noted Canada’s beef quota. Australia will also want a generous sheepmeat quota.

Since the agreement with the UK, Australia has grown its share of the beef and sheepmeat sector, but the UK remains a small market relative to its main export destinations in Asia and the United States.

As with Mercosur, there would be many benefits in a trade deal for the EU as a whole, but any beef or sheepmeat quotas for access to the EU market will increase competition for Irish farmers.