21 October 2021 The Agreement in Principle (AIP) signed between New Zealand and the United Kingdom represents a significant boost for New Zealand’s red meat sector.
Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) say farmers, processors, exporters and the New Zealand economy will benefit from greater export revenue once the Free Trade Agreement (FTA) trade deal is signed and ratified.
Key features of the AIP include improved access for high-quality New Zealand beef and more certainty for sheepmeat exports. The New Zealand red meat sector has not had quota free access to the British market since the United Kingdom joined the European Union in 1973.
While there are still some issues to be worked through, Sam McIvor, chief executive of B+LNZ, says the AIP is an important step towards the conclusion of an FTA between the two countries and builds upon the strong trade links between the United Kingdom and New Zealand.
“This allows British consumers access to best in-season products all year around, particularly during busy periods such as Easter and Christmas, which fall during the United Kingdom’s off-season meat production window.”
Sirma Karapeeva, chief executive of MIA, says an FTA will allow New Zealand companies the opportunity to sell a wider range of high-quality products into the United Kingdom market, particularly beef.
“Following the UK leaving the EU, New Zealand’s 1300 tonne beef quota was split between the UK and the EU, leaving New Zealand with only 454 tonnes of beef access into the UK. Outside of this quota, New Zealand beef exports attracted tariffs of up to 70 percent, meaning virtually no out of quota trade occurred.
“Improved access will allow companies to deepen and expand relationships, and crucially, compete on a level playing field with our international competitors.
“While the red meat sector is disappointed in the length of the transition period, and quality of access is often in the detail of trade agreements, we recognise that this was a difficult negotiation and want to acknowledge the hard work of negotiators and the Minister to achieve this result.
“With full tariff elimination after 15 years and quota volumes that grow until that time, companies will be able to build their interests in the United Kingdom market.”
The deal, once signed and ratified, will result in New Zealand beef and sheepmeat exports initially entering the United Kingdom under a tariff rate quota (TRQ) regime. New Zealand will be permitted to gradually increase its export tonnages over the 10-year transition period, while the quota will eventually be completely phased out.
That means product within the TRQ amounts will enter tariff free. While there will be no TRQ regime after a decade, a volume safeguard provision will apply to the end of year 15, beyond which no safeguards will apply.
Co-products such as processed meats, petfood, and offals will have tariffs eliminated at entry into force, meaning further value can be added to the carcass, which will flow back through processors and into famers’ pockets.
Mr McIvor says New Zealand and the United Kingdom are ideal trade partners with British consumers having high expectations for the quality and ethics behind their food.
“New Zealand and United Kingdom producers share common values and a commitment to high production standards and robust regulatory frameworks in important areas such as food safety and quality, animal welfare and the environment.
“New Zealand is one of the most sustainable producers in the world and we are well-placed to meet British consumers’ high expectations. New Zealand’s free range, pasture-raised farming systems means that our product is seasonal and the perfect complement to the United Kingdom’s northern hemisphere production.
“For B+LNZ, and MIA, this has been several years of intensive work and negotiations to get this result for New Zealand farmers, exporters, and indeed all New Zealanders.
“Looking forward, this is a positive step for the United Kingdom as it pursues membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement. The sector will continue working with British counterparts to inform and support their efforts to join this agreement.”
MIA and B+LNZ will continue to work with New Zealand negotiators as the final details are agreed to ensure a high level of ambition for the sector is achieved.