Comment: Brexit, the new Norm

Brexit

Just when you think you’re getting the hang of the old ‘new norm’ another one comes along to upset the apple/lamb cart, writes Ali Spencer.

This latest Norm, deserves its capital letter. Because it’s here to stay. As a dual NZ-British citizen, I watched in disbelief as the old country did the unthinkable. Voted out of the European Union, apparently on a basis of misinformation and scaremongering, and then … what? No apparent Plan B, or even Plan A.

The fast moving Brexit dust will take a long time to settle with leadership uncertainties for both of the UK’s leading political parties and the UK Independence Party leader stepping down, now he’s fulfilled his aim, he says.

At the time of writing, it is likely that, from formal activation of Article 50 in the Treaty of the European Union, it will take two years for the UK’s exit negotiations to be worked through, with some indications that full Brexit will be five to six years away. In the meantime, it will be business as usual for New Zealand meat though, like the rest of the world, we will have to weather the global economic repercussions the very local decision holds.

New Zealand meat has diversified its basket of export markets over the past few decades, away from the UK towards Asia and other countries. However, Europe, as a whole, is still an important market of value for sheepmeat – and the UK especially so for lamb. An EU quota for sheepmeat was set in the GATT Uruguay Round and currently enables a total of 228,254 tonnes of New Zealand sheepmeat to be exported to the region, though this has not been met in the past few years. In the year ending December 2015, sheepmeat worth over $1.4 billion was exported to the EU, with customers in the UK buying $619.5 million.

The EU-NZ free trade agreement (FTA) negotiations, aimed at modernising NZ’s relationship with the region, were scheduled to start in January 2017 and expected to take 12-18 months to work through. A lot of groundwork will already been done and will be an important platform for whatever is required in the new trade negotiations. B+LNZ and the MIA have been active in ensuring the meat industry’s concerns are forefront in our government’s mind as Minister Todd McLay has been discussing the Brexit decision with trade ministers in both the UK and EU.

New Zealand has also offered its considerable trade negotiation assistance to the UK. However, other countries are also similarly closely watching the situation, while European protectionist grumblings gain volume.

The New Zealand red meat sector was fortunate, in a way, that the referendum fell at the end of our meat export season. However, it will make the 2016-2017 season starting on 1 October one to watch, especially in the aftermath of other elections in our major markets, such as recently in Australia (which, at the time of writing is yet to be finalised) and on 8 November in the US.

Consumers will still need to eat good quality, safe food, though, and New Zealand is well placed to supply meat for Europe on a complementary seasonal basis.

All of this, and more, will be grist for the mill of conversations at the forthcoming Red Meat Sector Conference in Auckland in July. Registrations are open now. 

I’ll be heading off to Germany for the International Federation of Agricultural Journalists’ 2016 World Congress next week, followed by Scotland, and will report on what I find.

So, more interesting times ahead for meat exports… Never a dull moment!

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