Sunday, March 3, 2024

Sheep meat to be worst hit by no-deal Brexit

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Sheep farmers are likely to be the hardest hit of all British producers under a no-deal Brexit, resulting in clear knock-on implications for New Zealand sheep meat exporters, according to a new report from the Britain’s Agricultural and Horticultural Development Board.
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Warning that United Kingdom farmers in general could suffer a seismic trade impact from a no-deal, with British farm exports likely to be rendered uncompetitive under World Trade Organisation tariffs, the report said the damage to the sheep meat sector could be the worse of all. 

“UK sheep meat exports would suffer considerably if WTO tariffs of up to 50% of the price of meat were put in place,” it said, adding that would be a huge blow to the UK’s competitiveness.

“In addition, with around 90% of UK sheep meat exports being to the EU a no-deal is likely to hit UK sheep farmers’ incomes.”

Board analyst Rebecca Oborne warned UK sheep meat exports to the EU could be dramatically disrupted if the necessary post-Brexit export health certification process is either slow or cumbersome.

“If the UK leaves the EU in a no-deal situation on March 29 then, at the moment, there is a big question mark for sheep meat exports,” she said. 

“Tariffs and export health certification may also disrupt cross-border Irish trade as around 40–50% of lambs from Northern Ireland are sent to slaughter in the republic.” 

Oborne suggested there might be some new post-Brexit opportunities for UK exports to non-EU destinations, especially with the estimated surge of the middle classes in the Asia–Pacific region.

“The UK could potentially see sheep meat exports to Japan, following inspections by Japanese officials in summer 2018,” she said. 

“Discussions regarding access to the Chinese market for UK sheep meat are also getting under way. There is also potential to expand the UK’s exports of sheep offal to China as well as to other Asian and African markets.”

But a no-deal Brexit might influence exporters in New Zealand and elsewhere.

“We need to bear in mind that the UK would face strong competition from NZ and Australia,” she said. 

“This is especially true given their proximity to the Asian market and the fact that their costs of production are lower than that of the UK although there may be a limit to how much output could increase even in these countries.”

NZ and Australia already enjoy the sort of trading terms and relationship with China the UK still has to establish. 

“China has free-trade agreements in place with both NZ and Australia,” she said. 

“This is giving NZ tariff-free access to the Chinese market while Australia will have reduced tariff access until 2023 followed by tariff-free access, all of which further highlights the challenges the UK faces in order to compete with these top exporters.”

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