Brexit threatens export quotas

The Coalition is warning farmers of the dangers of a “no deal” Brexit and may demand compensation from the EU and Britain.

There are fresh concerns for Australian beef exporters after the US and the EU reached an ‘agreement in principle’ that would see the EU designate part of its beef quota for US suppliers. Picture: AFP

The Coalition is warning farmers of the dangers of a “no-deal” Brexit and may demand compensation from the EU and Britain over a ­decision that complicates the way in which Australian agriculture is exported to the region.

Trade Minister Simon Birmingham has also hit out at a new in-principle agreement between the US and the EU over beef, ­saying it could diminish market access for Australian beef producers.

Under post-Brexit trade rules, only a certain tonnage of Australia agriculture exports will be able to be sold to the EU and Britain, as the previous quotas that Australia had will be “split”.

Senator Birmingham said the “slicing and dicing” of the quota may not be fair as some goods may be delivered to one country but sold elsewhere and the new split quota could make it commercially unviable for Australian farmers. “That’s a problem for us ­because we’re not convinced the data is clear on where those goods are actually sold because many do come through a single port and flow elsewhere across the EU. So we think the proposed splits are uncertain at best,” he said.

Australia may seek compensation through additional tonnage being added to the quotas or through proposed free-trade deals with Britain and the EU.

“The Australian government is currently negotiating with the EU and the UK seeking compensation as a result of the ‘splits’,” the Department of Agriculture says in a statement on its website.

Former Australian trade diplomat Alan Oxley said there were also fresh concerns for Australian beef exporters after the US and the EU reached an “agreement in principle” this month under which the EU would designate part of its 45,000 tonne hormone-free beef quota for US suppliers.

“Australian beef suppliers to Europe should be concerned about the development,” he said.

Senator Birmingham said: “We have real concerns that there may be a proposal that the US has insisted upon with the EU that could potentially diminish Australian access for those particular beef producers.

“We are awaiting formal consultations with the EU about what exactly is proposed.”

Mr Oxley said Australia could have grounds to retaliate at the World Trade Organisation.

“Beef exporters could file a WTO lawsuit against the EU claiming they are being discriminated against in favour of US ­exports,” he said.

The federal agriculture department this month warned Australian exporters to seek legal advice in the event of a no-deal Brexit.

“You should consider how a ‘no-deal’ scenario could affect you, and seek commercial and/or legal advice as necessary,” the ­department advised on March 8.

Senator Birmingham said Brexit could have serious impacts for exporters and they needed to be prepared.