While Scottish farmers are well aware of the New Zealand lamb presence in supermarkets and catering sectors, the Australian meat industry isn’t as well-known in Scotland or, indeed, anywhere in Europe for that matter.

This reflects the fact that Australia has a relatively small presence in the UK market with either beef or lamb, because it has a very limited access. In all, Australia has an EU quota for 19,186t tariff-free for sheepmeat, compared with New Zealand, which has a 228,000t quota.

On beef, Australia has a 7,150t share of the Hilton quota, with a preferential tariff rate of 20%, and access to the 48,000t tariff-free quality beef quota,used by Uruguay, New Zealand and Argentina as well as Australia.

It is clear from speaking to Josh Anderson, the MLA man in Europe, that this is unsatisfactory from an Australian viewpoint, and it is something that they will be seeking to address in discussions just begun with the EU on a free-trade deal.

This negotiation is the current priority for Australia, as nothing will take place with the UK until after we leave the EU. However, he did recognise that there is a political willingness to make a deal with the UK, and Australia would have ambitions on meat access, though he refused to speculate on what these were.

Australian Markets

He did point out that, prior to the UK joining the EU in 1973, it was a key export market for Australia, particularly for dairy and meat products.

However, in the intervening years, Australia has developed a huge export business for both beef and sheepmeat. It is consistently among the top three beef exporting countries, along with Brazil and the USA, exporting in excess of 1m tonnes of beef annually.

On sheepmeat they are, along with New Zealand, the biggest exporters in the world, accounting for over two thirds of all exports. In the year to the end of May 2018, Australia exported 422,594t of sheepmeat, according to MLA figures.

The destination for Australia’s meat exports has changed dramatically since the UK was its key market in the early 1970s. As it didn’t get favourable quota access, it concentrated on developing Asian and North American markets. On beef, it has a 420,000 tariff-free beef quota with the USA, and this is taken up primarily with manufacturing beef for burger manufacture.

The USA is also Australia’s second-most-important market for sheepmeat exports, taking 70,000t in the year to the end of May 2018.

Importance of Asia

The biggest market for Australian beef currently is Japan, which took 306,000t to the year ending May 2018. This business is likely to develop further in the coming years with the resurrection of the Trans Pacific Partnership (TPP) deal, which has been agreed by the other countries following the USA withdrawal. This will progressively reduce the tariff on Australian beef sales to Japan from 15% down to 9%.

Trade negotiations

Farmers Journal Scotland enquired of Josh Anderson what Australian ambitions for beef and sheepmeat are in the trade negotiations recently started with the EU and, potentially, with the UK after Brexit.

He made it clear that, at this point, the focus is on the EU negotiations and was necessary because Australia has very restricted access at present. With Brexit, further uncertainty is created by not knowing how existing quotas will be allocated.

While it is obvious that Australia has ambitions about what level of quota access it wants on beef and sheepmeat, Josh Anderson refused to be drawn on a number.

However, he did note that Canada, a much smaller global exporter of beef than Australia, had secured a 50,000t tariff-free beef quota for sales to the EU.

While a negotiation separately with the UK isn’t on the agenda at present – and won’t be until after the UK is released from its EU obligations after Brexit and any transition period – he was nevertheless clear that the UK would be an obvious trade negotiation. This has already been said at a political level by both Australia and the UK.

If and when this point is arrived at, it is obvious that Australia will look to secure considerable access to a separate UK market, with equivalent access to other exporters to the UK market.

Anderson was unwilling to speculate on what shape a UK negotiation might take, because any start is still some way off and serious work has to be done by way of preparation at the UK end, such as getting a schedule of tariffs at the WTO.

Brexit has to be got out of the way first, was his concluding point.