European Union and New Zealand trade officials are still hopeful that agreement on a free trade agreement (FTA) will be reached by the end of the year.
Beef + Lamb NZ’s general manager policy and advocacy, Dave Harrison, told Rural News that while BLNZ hopes this won’t happen it is making preparations.
He says the UK political situation over Brexit remains in limbo as politicians struggle to agree among themselves as the clock ticks down to the ‘leave’ date.
“We are actively planning for the worst-case scenario,” said Harrison. “We are hoping that this will be a lost investment, but we are investing in the software and the computer programming we need to have to run a split quota system if need be.
“We are talking to exporters about what it means for allocation systems so there is actually a heap of work going on to make sure that on March 29 – if the worst happens – we are as prepared as we can be.”
Harrison sees a real possibility that Britain will crash out and that will be detrimental to NZ meat exporters.
An issue of concern is the arbitrary splitting of the sheep and beef quotas when Britain leaves the EU. Britain and the EU have agreed that there should be a 50/50 split of the sheepmeat quota and a 65/35 split for beef.
“Our argument is that splitting the quota doesn’t represent the full value of the quota,” Harrison explains.
“Because being able to send a certain amount of product to one country and then a certain amount to another 27 countries isn’t the same as being able to send it anywhere in 28 countries, which is the case at present.”
He says the issue may need to be sorted out through the World Trade Organisation (WTO) under whose rules the original quota was set.
Another issue relates to the onward shipping of product once it reaches Europe. Often cargo destined for the UK will initially arrive in, say, the port of Rotterdam and then be trans-shipped to its main destination, which is Britain. But he says it’s hard to understand what might happen under Brexit.
Harrison and a colleague are heading to Europe in the next week or so to talk to customs officials and try to clarify the situation.
He is hoping to get changes to the certification system, which would make things easier.