RED meat exporters are confident that this week’s state visit to Australia by Chinese Premier Li Keqiang will yield significant trade access improvements for Australian beef and sheep meat.
Trade between Australia and China will be a key focus of discussions during the official visit, and there are mounting expectations among meat processors that real, tangible improvements in access to China will be announced some time on Thursday.
Beef, lamb and mutton, and live sheep exports are seen as priorities in current trade talks, and Sheep Central understands that the Prime Minister’s Department has stepped in to lead the discussions, ahead of the Departments of Agriculture and Trade.
A few big wins in trade access would go some way toward helping restore Prime Minister Malcolm Turnbull’s and the Federal Government’s recent flagging popularity among voters.
Sheep Central understands that the much-anticipated reforms on red meat access focus on three or four key areas:
- Removing the current restrictions in chilled meat access, which currently see just 12 Australian establishments eligible to export chilled meat to China.
- Opening up access to all Australian export-eligible beef and sheepmeat plant to China. Currently eligibility to export any red meat – chilled or frozen – are limited by license. At least 15 Australian red meat plants which currently do not hold a license for China at all, are eager to participate. In total, about 60 plants are seeking to achieve secure access China for chilled and frozen beef and sheepmeat.
- Other items like offals and live sheep exports are anticipated to be included in this week’s high-level trade access talks. China could potentially be a very significant customer for a broad range of Australian beef and sheep offals.
- Sheep Central understands that at China’s request, donkey meat from Australia is also open for discussion during the trade talks. Although not widely traded, there are two Australia export meat processors currently licenced for donkey slaughter, and there are hundreds of thousands of feral donkeys scattered across remote parts of the Australian interior – principally in the Northern Territory. Kangaroo meat exports are not slated for discussion.
Premier Li Keqiang and his wife Madame Cheng Hong will visit Canberra and Sydney from Wednesday until the Sunday before heading to New Zealand. It will be the most senior visit from a Chinese official since President Xi Jinping’s trip in 2014, and the first by a Chinese premier to Australia in 11 years.
In his once-yearly press briefing in Beijing last Wednesday, Mr Li said China supported free trade and would continue opening its economy. His nation is championing the Regional Comprehensive Economic Partnership, a 16-nation trade deal that includes Australia.
The Australian Meat Industry Council’s Processor Council chief executive, Patrick Hutchinson, told Sheep Central this morning that AMIC had been working ‘hand-in-glove’ with the departments of agriculture and trade over the past number of months, providing all information requested by Chinese authorities.
“We’re now at that point where a framework has been developed, for the leaders to meet on, and discuss this week,” Mr Hutchinson.
There’s high expectation evident among individual processors that a breakthrough will be achieved on Thursday, but equally, past experience has shown that unexpected snags can, and often do arise in regulatory discussions with the Chinese.
“We have laid the foundation as best we possibly can,” Mr Hutchinson said.
Clear time-line essential
Processors told Sheep Central on Friday that one of the critically important measures of success out of any government announcement on Thursday would be clearly-defined time-lines for implementation. Too often in the past, such agreements have been struck, only for them to drift aimlessly – sometimes for years before implementation.
The US is undergoing such an episode at present, with little progress being made in establishing export protocols, after receiving ‘official’ approval to begin beef exports to China in September last year.
Glacial pace of progress
Despite resolute efforts by industry and Australian government, trade access improvements in red meat to China have moved at glacial pace over the past two years. Assistant trade minister Keith Pitt came under considerable pressure from Australian media during a visit to Shanghai last October, when he was asked to explain why progress in non-tariff trade barriers in foodstuffs to China had been so slow.
Chilled access concerns focus on food safety
As Sheep Central described in this earlier article following last October’s TSBE trade mission to Shanghai, China’s underlying wariness about opening-up chilled access for beef is related to food safety.
Chinese authorities are concerned that China’s still-emerging cold chain systems are not yet ready to handle larger volumes of chilled beef in a safe and secure manner, after arrival at port. In contrast, frozen beef is far more forgiving, if left out of cold storage for a period during the distribution process.
Just last week, Meat & Livestock Australia’s global markets forum claimed; however, that cold storage supply chains in China have in fact improved considerably, with new infrastructure and distribution channels emerging.