Unresolved Brexit issues put NZ sheepmeat market at risk

Whanganui farmer and B+LNZ director Kirsten Bryant expects the UK and EU to honour their legal obligations on quota.

Unresolved Brexit issues are clouding New Zealand's future plans to market beef and lamb in Britain and Europe.

Western North Island ward Beef + Lamb NZ director Kirsten Bryant said at the forefront of concerns was the EU and UK's proposal to 'split' the World Trade Organisation (WTO) Tariff Rate Quotas between them.

Both B+LNZ and the Meat Industry Association have strongly opposed the proposal.

The UK and EU have officially notified the WTO of their draft tariff schedules, which proposes to split tariff rate quotas that allows access for New Zealand sheepmeat and beef exports.

Bryant, who farms in Whanganui and King Country with husband Paul, said UK's vote to leave the EU has put at risk New Zealand's sheepmeat access into the EU and UK.

"This represents 50 percent of our global sheepmeat exports and we have no idea what the United States will do," Bryant said.

In response to the tariff proposal, B+LNZ and the MIA have registered their absolute opposition to the EU's proposal in person in Brussels, Geneva and London, as well as through a joint written submission to the EU Commission.

B+LNZ chief executive Sam McIvor said the New Zealand meat sector has been firm in its position since the Brexit referendum result came in June 2016.

"Our sector will not accept any proposal that erodes the quality and quantity of our WTO quotas," he explained.

"The tariff rate quotas form part of the EU and UK's WTO commitments and are legally binding rights and obligations. We expect both the EU and the UK to honour their legal obligations and commitments."

He stressed that the New Zealand sheep and beef industry is not seeking windfall gains from the Brexit process.

Bryant agreed with her chief executive and MIA chief Tim Ritchie.

MIA chief executive Tim Ritchie added that the sector cannot accept the EU and UK's 'split' proposal.

They believe New Zealand would lose the ability to adjust the destination of its exports in order to responsibly respond to the individual country market conditions across the current EU 28 membership.

"Markets are dynamic, domestic production and consumer demand continues to evolve, and it is important for market stability that New Zealand's sheepmeat and beef exporters are able to factor that into their marketing plans," Ritchie said.

"The ability to respond to market conditions and the resulting market stability is in the interests of both EU and UK producers and consumers. New Zealand has operated with this ability since the establishment of the WTO quotas and has proven its credentials as a responsible participant in the EU market."

Bryant and her fellow Kiwi advocates suggested that the UK agree on exit terms before putting forward tariff quota suggestions.

"We are also absolutely confused by the timing of this proposal — given that the terms of the UK's exit have yet to be negotiated between the UK and EU. Without clarity and details around the future trading relationship between the UK and EU, it is very difficult to assess the implications of their proposal.

"It is therefore both illogical and unacceptable to be put in a position of having to negotiate an arbitrary split of our legally binding market access rights when there is so much uncertainty about the shape of the future trading relationship between the EU and the UK."