Sheep meat tonnage into the EU is still a free trade issues.

AUSTRALIA’S peak sheep producer body has encouraged the Albanese Government to maintain dialogue with the European Union and continue negotiating in good faith to find a common free trade position of mutual benefit.

Sheep Producers Australia chief executive officer Bonnie Skinner made the comment after negotiations for a free trade agreement with the EU stalled before they began in Japan, with red meat quota being one of the big problems from the Australian side.

“This is a once-in-a-generation opportunity for our industry to improve our market access.

“In the lead up to the meetings in Osaka, Sheep Producers Australia had called on Minister Farrell and Minister Watt to maintain their resolve and ambition in securing commercially viable and fairer access for Australian sheep meat,” Ms Skinner said.

“Both the EU and Australia had a clear understanding that they were embarking on a transformative agreement when negotiations commenced – an agreement designed to enhance trade, not stifle it.

“The EU were not prepared to negotiate enough for the trade deal to be in our best interests, holding firm on its highly restrictive position for Australian sheep meat,” Ms Skinner said.

“As the peak industry council for Australian sheep meat producers, we are supportive of Minister Farrell and the Australian government holding firm and would like to thank the team who have been and are working to achieve significantly better outcomes for Australian agriculture.

“We encourage the government to maintain dialogue and continue negotiating in good faith to find a common position that offers benefits for both sides,” she said.

Minister Don Farrell is in Osaka, Japan, this week for the G7 trade ministers meeting and said he had full intentions of inking an FTA with the EU. However, he thanked his EU counterpart and said no thanks to what was on the table for a trade agreement.

Status-quo meat exports will remain, with the traditionally high value EU market taking limited tonnages from Australia and above quota import duties which make importing Australian meat not commercially viable in most cases. Australia currently has access to 7150 tonnes of country specific High Quality Beef quota access with a 20pc in-quota tariff, shared access to a 48,200 tonnes global grain0-fed beef quota and a 19,186 tonne country specific combined sheep meat/goat meat quota with no in-quota tariff.

Australia-EU red meat market access taskforce chair Andrew McDonald said the EU had not changed its previous offer, which Australia knocked back in July.

“We were here to represent the red meat industry’s interest in these discussions and it would seem they were short and sharp,” he told Beef Central.

“The EU was unwilling to improve on previous offers to the Government and no deal has been reached as a result. We quite clearly messaged that an improved deal was needed for Australia to not walk away and the EU made no changes.

“We are hopeful that there is a short break in the discussions, the ball is picked up again and there is a continuation of the negotiations because for both the EU and Australia it is too important.”

An EU spokesperson singled out Australia’s agriculture demands in a statement provided to news service Politico.

“The Australian side re-tabled agricultural demands that did not reflect recent negotiations and the process between senior officials. The European Commission stands ready to continue negotiations,” the spokesperson said.

Details of the deal remain elusive

The exact details of what the EU was offering Australia are still not widely known, with discussions remaining intensely private.

Tonnages of red meat are not known by many, with the red meat industry calling on the EU to base Australia’s deal off countries like Canada, which has duty-free access for 50,000T annually – and an additional 14,950 MT can be imported and shared with the US duty-free under the Hilton quota.

A Beef Central article after the meetings in July referenced reports of the EU offering annual beef quota of 24,000T; well short of Canada.

New South Wales processor Roger Fletcher said earlier this year that the EU was wanting to make distinctions between grass-fed and grain-fed in its quotas. The meat industry has told the government it does not want any distinctions between the two, arguing that it was a decision for the market to make.

Asked whether grain-fed beef was part of the problem, Mr McDonald said the discussions were too short for specific parts of the deal the be raised.

“Before they even looked at talking about potential splits in grain-fed and grass-fed beef the discussions had finished because the overall tonnages were the same,” he said.

Newly-elected National Farmers’ Federation president David Jochinke said the deal being offered was putting Australia at a disadvantage to its competitors.

“What was on offer would have hardwired protectionism into our trading relationship with Europe for another generation. It would have locked our farmers in at a disadvantage to competitors in New Zealand, Canada and South America,” Mr Jochinke said.

“Ultimately, we all want a deal with the EU that benefits both sides. We encourage the Government to maintain dialogue with the EU to work towards this if and when the time is right.”

What is next for the trade deal?

The G7 trade ministers are still in Osaka until tomorrow afternoon. Mr McDonald said he will also be there for the remainder and was hoping to have a clear path forward in the coming days.

Minister Farrell said in a statement that he was still keen to come to an agreement with the EU.

“Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends,” he said.

However, Minister for Agriculture Fisheries and Forestry Murray Watt told the ABC’s Radio National Breakfast program a deal was unlikely in this term of government.

“The EU elections will be next year. I can’t see them being in a position to resume negotiations before that,” Mr Watt said.

“We’ve made clear to them that we think it’s unlikely to occur within this current term of the Australian Parliament as well. So, it could be some time.

“The EU takes a very strong stand. It’s a very protectionist market when it comes to agriculture, and they weren’t prepared to budge enough for it to be in our interests.”

Lobby groups welcome delay

Prior to the trade negotiations, many agricultural lobby groups – including the Australian Meat Industry Council, the Australian Lot Feeders’ Association, Cattle Australia, the National Farmers’ Federation and state farm organisations – called on minister Farrell not to be hasty in the negotiations and to walk away from a bad deal for agriculture.

Many of them have welcomed the Government’s decision and encouraged the minister to keep negotiations going.

Hopes for fruitful China visit

The next round of trade negotiations are set to continue later this week as prime minister Anthony Albanese heads to China to meat with president Xi Jinping – which still has eight Australian processors banned from export meat there.

AMIC chief executive officer Patrick Hutchinson said he was hopeful no news from the EU this week will be replaced with good news in China.

“We are still hopeful for a good outcome in China, such is the cycle of trade negotiations,” Mr Hutchinson said.