Senate Foreign Affairs, Defence and Trade Legislation Committee [Part 2], , 1:30 to 14:24
Senator Henderson questions officials on the Australia-EU Free Trade Agreement, specifically comparing potential beef, sugar, and dairy quotas to the EU's deal with Mercosur.
Topics: EU free trade agreement, Trade policy
Speakers: Sarah Henderson, Mr. Lachlan Crews, Mr. Ravi Kewalram, Speaker 4, Raff Ciccone, Senator Raff Ciccone, Senator Sarah Henderson
kick off proceedings? >> Thank you very much, Chair. Good evening to you all. Uh, look, I just wanted to ask about Makosa, which has secured a 99,000 99 um,000 ton beef quotota at 7.5% duty plus its Hilton quota going to 0% through their deal. >> Got a couple confused I think
>> sorry Mer trade deal the South South American trade deal market. Yes. [clears throat] Yeah, I think we know what you're
talking about. Sorry, I have got a couple of confused faces at the table. That's
>> Yeah, the merkasur trade deal. >> That's right. That's right. >> So, I'm just seeking some information. Can extra Can Australia expect a a similar figure in the Oz EU FTA for our beef? And could we get an update, please?
>> Thank you, Senator. I'll ask Mr. Cruz to respond.
Uh thank you Senator Lachlan Cruz, acting first assistant secretary uh office of global trade negotiations. Um as was mentioned at the outset, Minister Farrell is in Brussels uh today meeting his EU counterpart, Commissioner Chevovich and the Agriculture Commissioner, Commissioner Hansen uh to progress Australia's interests in the FTA negotiations. Um, Merkasaur of course is a grouping of four South American countries um, major beef producers and you would be aware of the controversy that the merkasaur agreement has created in Europe. Um, I'm not going to speculate on what the outcome on red meat market access will be in our EUTA. We are a very different negotiating party to Merkasaur. We have different interests both offensively and defensively. uh and there's no expectation that the outcomes in Mkosaw will necessarily look like the outcomes
in our agreement with the EU. Well, Merkasur has secured a 180,000 ton sugar quotota with zero tariffs. Can Australia expect a similar figure in the uh EU FTA for our sugar?
>> So, similarly, we're aware of the the sugar sector's intense interest in outcomes in the EU FTA. Um but again we're one country. Mkasaur is a four country block um with very specific interests and I I don't think it's necessary that the two agreements should look like each other. So with the minister at a live negotiation in Brussels, I'm not going to speculate [clears throat] on what the market access outcomes might look like on particular agricultural commodities.
>> Well, our concern is that we need to ensure our producers here in this country get the best possible deal. So we've seen the benchmark [clears throat] And so you're not able to give us any comfort that Australia can secure a
similar deal. >> So the minister and officials in the department have had many discussions and meetings with individual exporters and with peak bodies in the various agricultural sectors. So we go to negotiations always seeking the best possible outcome for our exporters and producers. Um, of course, every negotiation is a balance of the interests of the two sides. Um, we don't necessarily consider the agreement that one or another counterparty reached with the EU as representing success or failure. Each agreement is different and specific to the negotiating demands of the two sides and their interests.
>> Will the government ensure Australia secures a broad dairy quota coverage across multiple product categories like Murkosaur was able to achieve?
Similarly, dairy is a sector of intense interest and and my uh my boss, the chief negotiator, Kathy Raper, has met representatives of the dairy sector very recently. So, we go into these negotiations fully across all aspects of their interests, their offensive interests. Um, we know that they're concerned about competing with imports from Europe once the deal goes through. So, all of those things are taken into the into account in the position that our negotiators take to the the negotiations. But I'm not going to speculate on what the outcomes might be. Nothing is agreed until everything's
agreed. >> But beef producers, for instance, deserve the very best. So on what basis would the government accept materially lower beef access than that granted to Merkasur?
>> Already answered that. >> I have answered that question. I feel senator. So um again Mkasur is a grouping of four countries with different interests to those of Australia. the agreement. Of course, agriculture is an important facet of it, but it will also cover, assuming we can get to conclusion, it will also cover uh investment, uh movement of natural persons, a full range of services, commitments, uh mutual recognition. There are many other elements of the agreement that go together to make a
whole s do a fine job representing Australia's interests.
>> He will. Has the department reviewed Merkasur's negotiated volumes and used this to support a better deal for Australia in the negotiations?
>> Um, we always look at the outcomes in the EU's agreements with third parties. So, they're a factor that we take into consideration. Um but it it doesn't we we don't necessarily take any particular agreement whether it's Merkasaur or Canada or New Zealand or India as representing what we should get because we have a different set of interests in our negotiations with the EU.
>> So what modeling if any did the government undertake comparing Australia's potential volumes with Merkosaur's access?
>> We have not modeled the outcomes of the Merkasaur agreement as such. we know what they are. Uh but modeling an FDA, the the process of economic modeling of an FDA is a very difficult exercise. >> So no modeling, no analysis. >> Analysis. Well, we we know what the MKAR outcomes are. Yeah. >> But we haven't done a process of economic modeling.
>> Have you got a best case scenario? Have you prepared any best case scenarios for what might be able to be achieved with
the EU? Well, the minister has said he doesn't do bad deals. We want the very best market access outcome on beef and sheep meat that we can get with the EU.
>> Um, what would Australia accept? And sorry, I'll say that again. Why would Australia accept an outcome inferior to a block with comparable agricultural export profiles?
Senator, just to say uh as Mr. [clears throat] Cruz has said, this is a live negotiation. Um the minister is in Brussels at the moment. Yes. >> Fighting for the very best deal we can get. Um at this point, comparing it to what, as Mr. Cruz said, what the EU has with others and so on is not it it's it's speculative.
So, is that going to be the benchmark the for Australia
the Merkasur deal? >> Uh, no Senator, I didn't say that. I said that it is a live negotiation. Um, and we are and the minister is fighting for every single >> uh industry sector and uh the market access and as Mr. Cruz said um there has been intense engagement with stakeholders. Um so we're out there to get the very best deal we can.
>> So there is no risk that the minister by design or otherwise and I'm not suggesting it would be by design but there's no risk that the minister would sell out Australian farmers.
>> The minister would never sell out Australian farmers.
Well, that's of great comfort. So, if there was any prospect of farmers being duted, is it the case that the minister simply wouldn't do the deal? Do you have sort of benchmarks set as to what's unacceptable? Do you have have you prepared any recommendations for the minister as in terms of the scope of the negotiations as to what's acceptable and what's not? And if so, could we have a copy of those materials on notice?
>> So negotiators go into every negotiation with a mandate. But I I'm afraid I can't give you our bottom lines in the negotiations that are happening today. >> And why not? Why couldn't you? >> Because they're confidential between the parties until the experience. When
you're in a negotiation with someone, you don't tend to reveal your uh >> negotiating position. I mean, you might do that differently in the Liberal Party, but that's how we operate. Um,
Minister Watt, >> I'd appreciate if you wouldn't reflect on other matters.
>> Well, it's an interesting approach to
negotiation that you're putting forward. >> And let me let me remind you of the rules of Senate estimates that the fact that a confidential document exists doesn't exempt it from being produced unless there is a public interest. Now, there may well be.
>> Are you seriously suggesting we should table the negotiating position of the
Australian government? I am I am just asking the question. Uh absolutely if you can make the case minister that this should not be uh tabled and made public I would welcome it but I must have
thought that case needs to be made. I would have thought it's pretty
self-evident but >> well well minister there may well be I mean in all seriousness there may well be certain thresholds where the government has is quite happy to say we will not allow farmers to be duted at this level for instance so there may well be so that's why I'm asking if you could take it on notice and consider the commercial and confidence matters and to the extent that we could obtain those materials bearing in mind that they may be exempt. Um, but this is a a matter of very high national interest, Minister,
>> which is why it's a good idea to not reveal your bottom line.
>> Well, I will leave that for you to assess in terms of uh whether you consider and whether [clears throat] the minister considers that this should be exempt. But uh obviously there is a great deal of interest in farmers getting the best possible deal. I will keep moving quickly through my questions. Can the department identify a single agricultural sector where Australia may secure a superior outcome to Merkasur?
>> Um, Senator, I'm not going to speculate on what the market access outcomes for agriculture might be in the EU FDA.
>> Merkasur was able to secure some carveouts for geographical indicators under a grandfathering prior user arrangement. you'd be familiar with that given Australia has been producing procco and feta >> for decades. Uh is this being sought with the EU? We're not going to lose our procco, are we? >> We're not going to lose our feta.
>> So, uh Senator, we're very aware of the EU's strong interest in a range of outcomes on GIS. They know that this is a very [clears throat] difficult issue for us for the the the reasons you've just articulated. Um we are engaging with the EU on GIS. Um EU the EU in all of its free trade agreements um has sought uh and in almost all cases has received an outcome on GIS from the other side. Um but again we will only do that as part of an overall package that is in the national interest. We're very aware of the potential for flexibilities and carveouts and grandfathering and phase outs and things like that. So uh again our negotiators are doing their very best to secure uh the most flexibility that we can in the negotiations
>> and you know I just want to make it clear when negotiations failed back in 2023 the trade minister said Australia needs meaningful agricultural access >> correct >> so what is the government's definition of meaningful in tons and tariff terms commodity by commodity could you take me
through that >> well Senator I think this gets us back to the question of the negotiating
mandate. >> So, we're not able to understand what meaningful agricultural access means.
>> Uh well, no.
>> I mean, is there is there a red line where the minister's over there doing the deal? Is there a red line where he is prepared to say under no circumstances would we agree to ABCD and E? Is there [clears throat] any way that you can give us any information which I think would give Australian farmers some
comfort? I think the minister already answered that. >> Well, Mr. Cruz is answering >> on behalf of the minister has actually already said that to be fair. Senator,