The Framework Explained: Market Access

For a beef business to be truly sustainable, it is imperative a positive cash return is achieved to provide a strong foundation from which best practice animal welfare, land management and other critical activities can be implemented, and the impact of more extreme seasonal conditions and weather events can be managed.

Because Australia exports more than 70% of its beef production, we rely on open and predictable access to a diverse range of international markets. There are many markets in which the Australian beef sector is active with high levels of regulation, in the form of non-tariff barriers. Our processors and exporters supply these markets with a range of products against tight specifications. From the highest value animals and cuts to a large range of co-products, industry’s sustainability depends on finding the highest returning margin market.

Preferential (or free) trade agreements provide access to a market beyond what is granted via the World Trade Organisation. While these negotiated agreements have significantly reduced the tariff and quota barriers Australia faces in export markets, in some cases a preferential trade agreement may still retain a (reduced) or transitional trade barrier.

While the vast majority of Australian beef exports now enter markets under preferential terms, the building blocks of the rules-based global trading system are being undermined by growing geopolitical tensions and renewed calls for protectionism. In this environment, future multilateral trade reform via the World Trade Organisation appears more remote, and, by extension, negotiating high-quality FTAs is more critical.

Data from 2022 ABSF Annual Update

Technical trade barriers such as the use of import permit restrictions, failure to grant export clearance, or unnecessary phytosanitary rules represent significant costs on Australian beef exports. This updated figure represents a 15% decrease in the same technical trade barrier costs captured in a 2017 survey. While this reduction is a small step in the right direction, the cost of new barriers that have emerged since 2017 are not included in this data.

The signing of the Australia-United Kingdom Free Trade Agreement (A-UK FTA) at the end of 2021 marked a significant step towards restoring access to what had been a key market for Australian beef exports. The A-UK FTA will deliver a ten-fold increase in tariff-free Australian beef access to the UK in year one. This will transition to tariff and quota-free trade over a fifteen-year period.

FTA negotiations are ongoing with the European Union and were launched with the United Arab Emirates in 2022.

While the recent signing of the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) improved access for some red meat products, negotiations are ongoing for a Comprehensive Economic Cooperation Agreement.

Ongoing challenges

Australian beef exporters have benefitted from some technical trade barriers being alleviated in recent years – notably, extensions to the required shelf life on imported chilled and frozen beef into key Middle Eastern markets – as a result of industry research and advocacy. However, other barriers and trade frictions have emerged and, in many instances, been exacerbated by the challenges of COVID-19. Of note, a string of Australian beef export establishments have been suspended from China – the largest buyer of beef on the global market – for various technical reasons over the last two years. In addition, the heightened spread of animal disease around the world highlights the importance of robust biosecurity measures and livestock traceability systems to maintain access to markets.

Two-pronged consideration

While ongoing access to key markets is critical to the ongoing resilience of the Australian beef industry, sustainability when discussed in this context must be considered in two ways:

• For a beef business to be truly sustainable, industry must maintain access to key markets to ensure profitability and economic resilience
• Increasingly, ongoing access to key markets will depend upon industry’s ability to maintain customer trust through data-driven demonstration of sustainability credentials.

The ABSF is important to achieving each of the above objectives, through consistent measurement of industry performance to both support communication of success and identify opportunities to invest and improve