Biggest immediate challenge is Brexit

Brexit

One of the biggest immediate challenges for New Zealand’s red meat sector in 2019 is the ongoing saga of the UK’s withdrawal from the European Union.

The New Zealand International Business Forum’s Steph Honey has rounded up ‘The (UK) winter of our discontent’ in a blog post an attempt to make sense of the NZ-UK-EU trade scenario. In that, she notes “the risk of a no-deal exit from the EU is high and growing” and that if that happens New Zealand’s exporters potentially will face severe disruption in the market from 30 March. A further complication is the lack of agreement about terms of access the UK can offer New Zealand  – this can’t be resolved until the UK resolves its own terms with the EU.

However, news from Prime Minister Jacinda Ardern last week that a Veterinary Agreement had been signed between the UK and New Zealand in London brought significant reassurance for New Zealand’s red meat farmers and exporters, confirming regulatory continuity for exports to the UK.

New Zealand is one of the UK’s oldest and most significant trading partners and the signing of the agreement will provide reassurance to New Zealand farmers and exporters, says Beef + Lamb NZ chief executive Sam McIvor.

“The UK accounts for $560 million worth of the sector’s exports dominated by sheepmeat which represents 85 percent of that total,” he says.

Since the Brexit vote in 2016, there has been a lot of uncertainty for the sector, says Meat Industry Association (MIA) chief executive Tim Ritchie.

The signing of the agreement, together with recent advice from the UK about the acceptance of EU Health Certificates post 29 March 2019, means the red meat sector is assured existing regulations will remain the same – helping to alleviate some of exporters’ immediate concerns.

The Veterinary Agreement is key to New Zealand’s sheep and beef exports to Europe as it establishes the principle of equivalence of sanitary measures and has reduced many potential trade irritants. It has improved communication and cooperation on sanitary measures and has streamlined requirements to facilitate trade. The same will now apply to the UK.

“The UK is an important market for New Zealand high-value chilled lamb exports and Brexit falls at the critical time of our Easter trade. It is important that all steps be taken to secure continuity and stability for our exporters through the Brexit process,” says Ritchie.

However, there are other aspects of the trade relationship that still need to be clarified, for example around animal welfare standards recognition and on-going documentation requirements to support seamless trade to the UK.

“While we still need to work to get clarity around how our quota rights will be recognised, we support Prime Minister Ardern’s statement that New Zealand should not be left worse off as a result of Brexit – with our top priority being continuity and stability, which is in everyone’s interest, including the UK’s,” says McIvor.

“We want to work with the UK to ensure we can continue to build an even stronger relationship and it is important that both governments put contingency plans in place to ensure trade continues, regardless of any Brexit outcome.

“Once the UK is in a position to do so, the sector fully supports the negotiation of a high quality free trade agreement that addresses each side’s priority interests.”

Both say the sector would like to thank the Prime Minister and her officials for their work in providing assurances to the sector of veterinary regulatory continuity and on minimising trade disruptions. B+LNZ and the MIA look forward to continuing to work with the governments of New Zealand and the UK, industry partners, and the New Zealand Meat Board to address remaining issues as this sector prepares for any Brexit scenario.

 

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