What is happening now?
As you will have seen in the news recently, Boris Johnson’s Conservative party won a resounding majority in the recent British election. One of Mr Johnson’s election promises was to get Brexit done, and with this large majority, he now has the ability to do this after his first attempt was blocked by the previous parliament.
The new parliament will likely vote on the Brexit Plan this Friday, aiming to have the UK leave the EU on 31 January 2020.
What happens after January 31st?
The UK and the EU will enter a transitional period that is currently expected to be just under a year, while they figure out the next steps on issues such as trade, immigration, defence, and tax. During this time the UK will follow EU law. Boris has said that this transitional period is only to last until December 31st 2020 and if no deal is reached before then the UK will leave without an agreement.
What does this mean for New Zealand sheep and beef farmers?
In the short term – nothing will change in terms of New Zealand’s WTO and other market access rules into the EU and UK.
During the transitional period all rules and regulations stay the same.
Once the EU and the UK have agreed on future arrangements, this may change. For example the UK may decide to adopt different import health standards than the EU. It is however, unlikely that they will change significantly, as the UK will still have to ensure that it food production standards are equal to the EU’s if they wish to export to the EU.
Beef + Lamb New Zealand, the Meat Industry Association and the NZ government are still working with British and European officials on how our WTO quotas for sheepmeat and beef will be managed between the EU and the UK after the end of the transitional period. At present the UK and EU have proposed that our quotas are split in half, which we are opposed to.
What about future free trade agreements (FTA’s) with the EU and the UK?
New Zealand does not currently have a free trade deal with either the EU or the UK, instead our access to their red meat market (sheepmeat and beef) is through a World Trade Organisation tariff rate quota, where our exports within these quotas have zero or relatively low tariff rates.
Once the UK has officially left the EU on January 31, they are able to begin negotiating trade deals with other markets. The New Zealand government is already having preliminary discussions with British officials on this subject. Negotiations are also ongoing with the EU. We are hopeful the outcome of these FTA’s will increase New Zealand’s access to both the UK and the EU market.
