Senate Foreign Affairs, Defence and Trade Legislation Committee [Part 2], , 1:15:56 to 1:24:22
Analysis of Australian beef export growth and market access outcomes compared to international competitors.
Topics: Beef exports, Exports, Trade policy
Speakers: George Mina, Speaker 6, Cathy Raper, Unknown Speaker, Interjection
>> thank you, Chair. I want to ask some questions in relation to uh Australia's red meat market access issues if I can. Um just for context, what what's the volume of beef that we sell internationally and how has that number changed over recent years?
Well, Senator, we've had an extraordinary uplift in the last five or six years in Australia's beef uh exports internationally. Uh from something like 8 or 9 billion five or six years ago to uh 20.8 billion in 20 256. So uh our beef trade is strong.
What would be the the causes of that growth? What's the main driver there,
>> Senator? Uh there's a variety of of reasons for that. Part part of it relates to herd sizes and sustainability in major producing countries. Uh part of it relates to our relative uh market in in in relation to other major exporting parties. where for instance in the United States our our beef exports enter tariff-free. Um I I would hesitate to get into the climatic and other production conditions related to the expansion of the Australian herd, but clearly uh the success of our own uh production uh factors and capability is is big part of this and and uh uh economists at the Australian Bureau of Agriculture and Resource Economics would no doubt be well placed to to talk those through. But trade is a big feature obviously and the trade environment and the access we've been able to win uh uh for this success.
>> There's been a lot of commentary around um how the proposed EU free trade agreement uh would affect beef. Could you just give us in clear um numbers precisely what is the outcome for beef in the trade in the trade agreement?
>> Um yes of course Senator. Um, so I guess the important comparator is our current access for Australian beef to the EU market. Our only current guaranteed access is 4,400 tons. So under this free trade agreement, we'll be able to increase that access um guaranteed preferential access to 35,000 tons. Um that is split into a number of different um buckets which I can go into if you wish. Senator,
>> if I may also, Senator, just to add to M. Rover's evidence, uh the comparative outcomes here with reference to competitor exporters into the EU are extremely strong. Our access uh which is now eight times higher under this FTA for beef into Europe uh is more than individual Merkasur countries were able to win. more, three times more in fact than New Zealand was able to achieve, three times more than Mexico was able to achieve and equivalent to the quantum of fresh and chilled access that Canada was able to achieve. Uh but we also know that Canada has been unable to use uh uh uh its full access which is larger than ours uh uh in theory but the but their ability to use has been restrained. So this stacks up as uh if not the best one of the best outcomes anyone's able to achieve on beef into
>> the conditions attached to our access are also better. Um for example we have no frozen only requirement. Um whereas um in the merkasur deal um roughly half of their access is reserved for frozen beef. Um the Merkasaur countries also are continued to be subject to a 7.5% tariff whereas twothirds or almost twothirds of Australian beef under this deal will be duty-free.
>> Okay. So to summarize that to to be clear the outcomes for beef are superior to the status quo and superior to the outcomes negotiated for the merkasaur countries.
>> That's right. and and Senator these were both on the quality of the outcomes as M Robers's just set out and the quantum of the access we achieved these were extremely hardfought negotiations. Uh now we've been at this deal to get access to EU agriculture for 20 years in various fora the World Trade Organization and then in this bilateral free trade agreement. Uh our negotiators led by MRAE achieved uh some extraordinary results and and this access is highly usable. It'll allow us to access that high premium price market in the EU of 450 million consumers. Uh and it'll allow us to uh keep pace with and beat competitors who are moving ahead in their own access. Again, the counterfactual stand still, gain nothing and worse see our market share uh taken by other competitors. So,
so and you know as a very experienced negotiation team the idea that there was something better on the table or there's some mythical um superior outcome that that's just not the case. I
>> I was uh in in uh various of the rooms with U minister who of course uh had led a very difficult negotiation with both commissioners for trade and agriculture. uh we left nothing on the
>> Thank you. Um could I also focus uh now on an issue that I'm passionate about a Tasmanian uh vegetables and um the industry body ove veges strongly backed the the trade agreement and I saw a quote where they've warned that a popular stampede to stop this free trade agreement risks severe collateral damage to Australian vegetable growers and our national food security. And I know in Tasmania for example uh Premium Fresh at fourth which employs about 150 people and exports vegetables to Europe. They currently face what when a carrot arrives in Europe I think it's uh if you could confirm this it's greeted with a a welcoming uh gift of a 3.6% tariff and I think an onion arrives with about a 9.6% tariff. So can you confirm under under this deal that's been negotiated that those tariffs would actually disappear immediately and what what does that actually mean for the competitiveness of our um vegetable growers such as Premium Fresh at fourth?
>> Um thank you Senator. Um yes on on entry into force the vast majority of EU tariffs um will be eliminated. Um that includes um tariffs on u on vegetable um and vegetable products. Um for example, we will um under this um FTA on on entry into force um we will see the 9.6% tariff on onions to the EU eliminated. We will see the 13.6% tariff on carrots eliminated and tariffs of up to 11.5% on potatoes will be eliminated. Great.
>> I've also seen some disturbing reports that um about losing market share to New Zealand. Uh, so Chelton Farm Produce in northwest of Tasmania previously export as much as 1,200 tons of onions to Spain, but that that trade has fallen to zero since New Zealand secured preferential access under its own agreement with Europe. So can you explain the competitive disadvantage Australian growers have faced since that New Zealand free trade agreement came into effect and how our agreement would help to uh address that?
>> Well, New Zealand has had those tariffs eliminated. We have not and we will not have them eliminated until this treaty enters into force. Um so we are currently at a significant tariff disadvantage and as a result New Zealand has obtained that market share. This free trade agreement offers an opportunity to level that playing field with our competitors.
>> So the the longer that we don't um we we still stay with the status quo and don't achieve this agreement that the longer our growers face that disadvantage.
>> Correct.
>> Yeah. Okay.