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LONDON — Britain is at risk of being outclassed in trade negotiations with Australia on its home turf.
Elisabeth Bowes, Australian chief negotiator, has been speaking to British food producers to gather intelligence on pain points for the U.K. as the two sides discuss a deal on Friday.
Bowes and her team are in London to support Australian Trade Minister Dan Tehan’s visit and have been meeting with key British industry groups on areas of pressure in the talks, three people with knowledge of the meetings said.
The meetings have centered on how far Britain might go to liberalize market access to its food and drink and agricultural sectors for Australia.
Bowes and U.K. Chief Negotiator Vivien Life are part of Tehan’s talks with Trade Secretary Liz Truss which began Thursday and continue on Friday. The Australian negotiator is expected to leverage what she has learned.
Market access for Australia’s agricultural goods is a major sticking point in negotiations, said one person with knowledge of the talks. Bowes and her team wanted to “see the color of our eyes” when it comes to Britain’s food industry, they said.
The Australians are after as much liberalization in the sector as possible, the person explained. They want an increase in quotas for their meat and other animal products and a gradual move to total liberalization over a number of years.
In an op-ed published Thursday, Tehan highlighted limits on market access for Australian cheese, beef, and other meats. “You’re missing out on eating the best lamb chops and porterhouse steak in the world,” he told Britons.
As Australia is on the other side of the world, it’s unlikely these products will rush onto supermarket shelves. “The kind of beef you probably end up getting from Australia is not going to end up as a nicely packed steak in [supermarket chain] Tescos,” the person explained. “It’ll end up as mince in a pie or a service station beef sandwich, something like that.”
Yet with Britons consuming about 50 percent of their food outside their homes before the pandemic, the potential value to Australia’s meat producers is huge. Australian farmers can produce their meat more cheaply because of economies of scale as their herds are much bigger and they’ve got more land to raise the animals compared with the U.K.
Lower prices for Australian meat will put “big pressure” on Britain’s food services — think canteens in schools and hospitals — to choose it over more expensive British products, the person said.
Coupled with new barriers to trade with the EU that will cause problems “for months, if not years,” they added, negotiations to join the 11-nation CPTPP trade bloc and talks with New Zealand and with Canada will have a “potentially massive” impact as each country takes a slice.
British beef, sheep and chicken farmers are also facing pressure from the loss of millions in EU subsidies replaced by a new domestic scheme that supports them for their environmental stewardship rather than as food producers.
Australian negotiators have been made aware of the impact that the switch will have on Britain’s industry.
A person familiar with the British meat industry’s thinking said the deal holds out more potential for Australia to get access to Britain’s market than vice versa.
The benefits of the deal are “weighted to” Australia, the person said, as Britain exports mostly pork to the Pacific nation.
The first person said they are confident Truss understands the importance of standing up for British agriculture and food production in the negotiations as she represents one of a handful of constituencies categorized as 100 percent rural.
But if Truss “sticks to her guns as she said she will,” they pointed out, “where’s the kind of landing space?”
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