US targets NZ lamb!
US sheep farmers have set their sights on New Zealand lamb imports, claiming NZ sheep meat is decimating their industry.
The decision by a majority of the people in the UK to effectively vote themselves a recession is astounding. But then across the Atlantic one Donald Trump also has an unbelievable following which defies logic.
In many ways, Britain's relationship with the EU has been more a de-facto rather than fully consummated marriage. An example of this was the UK's decision to retain the pound as its currency while everyone else opted for the Euro. This is supposedly a return to the 'good old times' or shall we say 'old times'.
So what will Brexit mean for NZ? It will be mean a flurry of diplomats and politicians working to establish new trading partnerships with the EU and the UK in the next two years. In some ways it's back to the 1970's when NZ politicians made regular pilgrimages to European capitals to secure access for our primary products – notably meat and dairy.
Already Beef+Lamb NZ have expressed their concern at what might happen to sheep and beef exports in the light of Brexit. Our sheep and beef trade to both the UK and EU are inextricably linked through quota access and both are likely to be affected according to Sam McIvor, chief executive of BLNZ.
He points out that the EU is New Zealand's most valuable market for red meat and associated co-products, accounting for over NZ$2 billion in trade last year. Also that NZ's sheepmeat quota to the EU of around 228,000 tonnes represents over half of New Zealand's sheepmeat exports of which the UK currently takes half.
Both the Meat Industry Association and Beef+LambNZ say their top priority now is to work with the NZ government to ensure that access for these products is retained.
There are also other products such as dairy, wine and wool which will need to be accommodated in the negotiations.
Federated Farmers president William Rolleston is also urging government to get on the job immediately in respect of negotiations with the UK and the EU. Rolleston says Brexit may provide an opportunity for some exporters to the UK.
Ian Proudfoot of KPMG says from NZ's point of view, Britain's exit from the EU, could probably create an opportunity for NZ. He says Britain will probably look to its old commonwealth allies such as Canada, Australia and NZ to get a special trading agreement in place. But he says on the downside, Britain exiting the EU means NZ will lose the leverage it has with that group by virtue of its special relationship with Britain.
While the deals NZ has in place with the EU won't change for the next two years, the biggest worry for NZ will be any recession – global or local - triggered by Brexit which could put further pressure on our primary exports.
What is certain is the Brexit has created great uncertainty and it will take time to realise the implications of the vote.
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