THE potential for Australian lamb producers from coming European Union and United Kingdom free trade agreement discussions is for more fairer access based around production seasonality, according to Meat & Livestock Australia.
MLA international business manager for Europe and Russia, Josh Anderson, said European and UK sheep meat production occurred at certain times of the year.
The northern hemisphere spring months are March, April and May, whereas most Australian new season lamb is turned off during September, October and November.
“It’s counter-seasonal to us, so it is the perfect complementary relationship, which the New Zealanders have filled up until this point.
“From an Australian industry point of view we want to be able to meet that demand as well,” Mr Anderson said.
“We would certainly not be cheaper than UK product by the time that we ship it all the way over to the UK.”
Australia “ahead of the game” on FTA discussions
Mr Anderson said a scoping exercise for an EU-Australia free trade agreement will be completed by the end of this year.
“At that time the European Union will seek a mandate form the 28 member states and we are hoping to start negotiation on an FTA with Europe by mid-next year, which is a huge win for us as an industry.”
He said the Australian red meat industry was “ahead of the game” in pre-FTA discussions.
“I think our industry is extremely engaged, including the Sheepmeat Council of Australia, to get a good deal out of this free trade agreement.
“I think we have proved in the past with other FTAs that we’ve come out with good deals and this will be no exception.”
Australia’s sheepmeat access to the EU is currently constrained by a 19,816 country-specific quota and regularly fills this, although it only consigned 13,000 tonnes last year. However, New Zealand enjoys 228,000 tonnes of EU sheepmeat quota. Access above Australia’s EU quota tonnage costs import duties of 12.8pc plus up to €3.1/kg effectively stifles most above-quota trade opportunities.
Trade in goods between Australia and the EU was worth A$80 billion in 2015, with the Australian sheepmeat industry contributing just 0.25pc in exports to overall trade.
Mr Anderson was with Member of the European Parliament Derek Vaughan during his recent visit to Australia, touring sheep meat and beef properties, and having discussions with the Sheepmeat Council of Australia.
Mr Vaughan said feedback he received from Australian producers was that the country produced a high quality product with a high cost of production.
The complementary aspect of the Australian and EU lamb supply would be an important question for future discussions on an EU-Australia Free Trade Agreement or maybe an UK-Australia FTA, he said.
“One of the things we are going to have to demonstrate is that there will be some advantages for the EU and the UK as well.
“And therefore we need to talk about the good quality of the mutton and lamb coming from Australia, we need to talk about the good practices that are in Australia in terms of research, and in terms of the collection of data and analysis.”
Possibility to import more Australian lamb
Mr Vaughan said there was a need to talk with Australia about the potential for the exports into the EU and the UK on a counter-seasonal basis.
“Our main season is our spring and outside of that maybe there is a possibility to import more from Australia.”
There is also potential for co-operation on promotion, because the UK cannot meet its domestic market demand for red meat, he said.
“So therefore there will be opportunities to increase exports into the UK.”
“All of this will depend on what trade arrangements we can put in place,” he said.
“Early next year or the middle of next year, free trade agreement talks will begin in earnest between the EU and Australia, so a deal will be done there in perhaps two or three years.
“Once the UK leaves the EU around June-July 2019, then formal negotiations can start between the UK and Australia about a free trade agreement.”
EU sheep meat self-sufficiency at 87pc
The EU’s self-sufficiency for sheep meat is currently at 87pc with an average per capita consumption of 2.1kg. Last year, the EU imported 212,000 tonne of sheep meat, of which 85pc came from New Zealand. EU sheep exports amounted to 61,000 tonnes, half of which were live animals.
The recent EU Sheep Meat Forum described the sector as vulnerable or sensitive, facing a number of significant challenges including low incomes at farm level and weak financial sustainability, dependence on direct supports, declining consumption, low productivity and higher average age profile of both producers and consumers.
The forum recommended strong future CAP support for sheep producers, including coupled supports as well as prioritised and enhanced rural development measures. Recognising the key role sheep play in enhancing the environment in extensive grassland systems, the forum recommended the European Commission consider a new environmental payment. The forum also recommended a new sheep meat communication and promotion program, with a strong focus on the internal market aimed at positioning EU lamb as the automatic choice amongst EU consumers.