Meat exporters fear erosion of EU access
"Every time you distort a market by trade restrictions, you actually upset a finely tuned balance." James Parsons, Beef+lamb NZ
The European Union and the United Kingdom have made a preliminary deal to change the terms of New Zealand’s meat access to the region.
At present New Zealand exports more than $2 billion worth of red meat to the EU, most of it sheepmeat. It has a tariff-free quota of 228,000 tonnes of sheepmeat a year, although it virtually never fills it.
About 55 per cent of the sheepmeat is consumed in 27 EU countries, and 45 per cent is consumed in the UK. This week the EU and the UK agreed to split the quota according to where the meat was previously consumed over a three-year period.
However, Meat Industry Association chief executive Tim Ritchie said the deal would take away any flexibility for New Zealand exporters.
If, for example, Britain decided in the future it wanted to take more New Zealand sheepmeat than it does at present, New Zealand would have to pay a prohibitive 50 per cent tariff on any extra.
‘‘The beauty of the existing arrangement is that we have the flexibility within that to allow the market to devolve in line with the demand either side of the Channel, and who knows what’s around the corner,’’ Ritchie said.
The quotas for sheepmeat and beef are protected under World Trade Organisation rules in perpetuity, or until affected countries agreed to renegotiate them.
Beef+lamb NZ chairman James Parsons said it was a concern that the EU and UK had made a deal without consulting New Zealand or Australia, who would be similarly affected.
It was not correct to say, as had been reported, that New Zealand had been pushing for an increase in the combined UK-EU quotas after Brexit, to avoid any reduction in trade with Britain.
‘‘We aren’t looking for any windfall gains. However, we can’t contemplate a situation where the quality or quantity of New Zealand’s existing WTO market access rights with the EU or UK are eroded,’’ Parsons said.
Parsons raised the scenario whereby selling to the UK might become unattractive to New Zealand because of its weak pound, and Europe did not take British sheepmeat, which at present amounts to a 100,000-tonne trade.
‘‘We wouldn’t be able to move a greater proportion of product into the EU, especially if they are short, because UK lamb isn’t going into there. That would be bad not just for New Zealand but for UK and Europe too,’’ he said.
‘‘Every time you distort a market by trade restrictions, you actually upset a finely tuned balance.’’
Parsons said officials from the Ministry of Foreign Affairs and Trade were working on measures to ensure New Zealand’s interests were maintained.