Wednesday, September 27, 2017

Import threat to sheepmeat sector

Australia and New Zealand are pushing the UK to open its food market after Brexit and allow the same quota of low-tariff imports as they send to the whole of the EU. The UK would mirror the tariff rate quota of the whole EU bloc which would mean that larger imports of sheepmeat would be admitted tariff free. It is also likely that Australia would be interested in increasing their exports of cheese to the UK.

This could be devastating for the sheepmeat sector which has always been the most vulnerable to Brexit through a combination of increased imports and tariffs on exports to the EU. Upland farming is highly reliant on sheep.

The Government has produced some warm words, but Defra secretary Michael Gove has talked about 'an outcome that is net positive for UK agriculture.' In other words, some vulnerable sectors could take a hit.

Applying the whole EU TRQ to the UK would avoid the tricky problem of dividing it up while the EU would want to avoid a situation where its trading partners demanded compensation because the UK's departure would make their access quotas less valuable than before. This would particularly apply where an exported product is popular in the UK which is true of sheepmeat. It would also offer lower prices for consumers. Sheep farmers may have a tough fight on their hands.

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