What does Brexit mean for Aussie red meat?

And just like that the UK has left the EU single market and customs union at 11pm on 31 December 2020. Despite speculation about the prospect of a no-deal, it was sealed on Christmas Eve with agreement to the terms of trade between the UK and EU.

Most significantly for the intrinsically linked EU and UK red meat trade, the deal, known as the EU-UK Trade and Cooperation Agreement, allows for full tariff liberalisation (ie no tariffs), meaning, for the most part, the established red meat trade between the EU and UK has been largely unscathed.

For Australian red meat exporters, however, the immediate outcome of Brexit is not as frictionless, as Australia’s current EU beef and sheepmeat tariff rate quotas have been divided between the EU and UK – further constraining Australia’s small volume access and removing the flexibility of shifting product according to consumer demand between the EU and UK markets. 

From 1 January 2021, Australia’s access to the EU and UK markets is as follows:

• Australia’s previous 7,150 tonne EU Hilton beef quota has been split: 3,389 tonnes to the EU and 3,761 tonnes to the UK
• Australia’s 19,186 tonne sheepmeat/goatmeat quota has been split: 5,851 tonnes to the EU and 13,335 tonnes to the UK.

As a consequence, Australian exporters now have to navigate several quota regimes – an unfortunate Brexit outcome. However, on the positive side, trade can keep flowing.

The ultimate ‘fix’ to improving this outcome will be via the two separate but parallel Free Trade Agreements (FTAs) Australia is negotiating with both the EU and UK. These negotiations will be crucial to securing much-improved, long-term preferential access to these high-value markets.

Despite COVID-related disruptions throughout 2020, four rounds of the Australia-EU FTA negotiations were successfully held – one in Canberra and three virtually. Similarly, the Australia-UK FTA negotiations have made progress since being launched virtually in June, followed by three virtual negotiating rounds. With further virtual negotiating rounds for both the Australia-EU FTA and Australia-UK FTA scheduled for the first quarter of 2021, it is encouraging to see the momentum continuing.

From an industry perspective, FTA advocacy activities will ramp up in 2021 – led by the EU/UK Red Meat Market Access Taskforce (with MLA as the secretariat). This year will be a defining one for improving Australian market access into both the EU and UK – and resources will continue to be prioritised to help secure the best possible outcomes.

© Meat & Livestock Australia Limited, 2021