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Australian meat industry licks lips at post-Brexit Europe
[SYDNEY] As Britain's divorce from the European Union begins Wednesday, Australia's meat industry is licking its lips at the prospect of a boost in exports as London scrambles to sign free-trade deals across the globe.
Pro-leave politicians promised before last year's referendum that an exit would allow them to hammer out a series of pacts around the world, free from what they called the shackles of EU quotas and giving the country better deals.
Now, as they prepare for two years of divorce talks that could see Britain completely cut off from Europe's gigantic free-trade bloc, officials in Westminster are keen to start work on agreements elsewhere.
And that, says Josh Anderson of industry research group Meat & Livestock Australia (MLA), could be a big benefit to the meat industry down under, while a rotten meat crisis in Brazil might also provide an opening.
"Brexit provides a unique opportunity for Australia to enhance its trading relationship with the UK," he said.
Australia and Britain will have to redefine their commercial relationship outside of the EU, with Canberra saying shortly after the Brexit referendum that it wanted a free-trade agreement with London.
The biggest buyers of Australian beef are Japan, the United States, South Korea and China, with Europe trailing far behind with exports limited by quotas and taxes.
Sales of beef and mutton to the EU account for just two per cent of its overseas shipments - but in 2015, more than half the of those sales headed for Britain.
"We have a very limited EU access," said Geoff Pearson of the Cattle Council, which represents breeders.
"If quotas and tariffs are changed, then yes, potentially, this market will be more attractive," he said, adding that it could be particularly beneficial for high-end products.
"Australia and the UK have a rich trading history," the MLA said in a note after June's Brexit vote.
In the 1950s, between 50 and 80 per cent of Australian beef and veal headed to Britain but this dropped off significantly when Britain become joined the EU's forerunner in 1973, it said.
After Brexit, London vowed to boost its trade ties with the Commonwealth.
However, Australia is also hoping for better access to Britain's former European partners.
"EU market potential is extremely positive," with 500 million inhabitants, said the MLA's Anderson.
The European Union is a small market in terms of volume but it buys quality meat from Australia, meaning the price per tonne is nearly double that of other markets, the MLA says.
A free-trade agreement is therefore "a priority" for the organisation, with Canberra and Brussels having already signed an accord agreeing to initiate a process, and with negotiations set to begin this year.
Meanwhile, the huge scandal over tainted meat exports from Brazil - the main seller of beef to Europe outside European producers - has come at the right time for Australia.
The scandal broke when an investigation revealed that some packers had paid crooked inspectors to pass off rotten and adulterated meat as safe.
About 20 countries, including the EU, have since fully or partially closed their doors to Brazilian meat imports.
While negotiations with Britain and Brussels will likely take years, Australia is making great strides in China where a free-trade deal has been in place since 2015.
Last week, Canberra and Beijing signed an agreement to extend access for Australian meat producers to China.
"Australia's beef exports to China have grown from less than US$100 million in 2011 to exceed US$600 million in 2016," according to Australian minister of commerce Steven Ciobo.