Friday, March 29, 2024

Ag export sector backs scrapping UK tariffs

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New Zealand’s largest agricultural export industries have given conditional backing to calls for Britain to scrap tariffs on food imports.
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Britain’s Trade Minister Liz Truss set up the Trade and Agriculture Commission last year, to plot a path forward for the country’s trading relationships with the rest of the world following its departure from the European Union’s customs union on January 1.

Former NZ trade minister Lockwood Smith, who joined the commission as an expert on international trade and helped write its final report published in February, has said its recommendation to Truss to open the border to food imports from countries with equivalent animal welfare and environmental standards as the UK is potentially a breakthrough moment for NZ dairy and beef exports shut out of the British market by high EU tariffs since the 1970s.

Smith briefed NZ dairy and meat industry representatives on the report earlier this month.

Dairy Companies Association NZ executive director Kimberly Crewther says the dairy industry supported the recommendation to scrap tariffs, but was not popping the champagne corks just yet.

“The key is how the UK government picks this up and translates it, but we have been really interested to see the recommendations and particularly have noted the principle of promoting trade liberalisation generally, and the UK taking global leadership and being in the UK’s own trade agreements. That is something we strongly back,” Crewther said.

She says the dairy industry could live with the removal of tariffs being linked to animal welfare and environmental standards, so long as they were based on science, were consistent with World Trade Organisation (WTO) principles, and were not simply a fresh means to keep imports out.

“Where we would be concerned is if such an approach ended up introducing layers of prescription and administrative complexity,” she said.

“They need to be in line with the principles of the WTO, so no more trade-restrictive than justified to achieve the science-based outcome.”

Crewther says the NZ dairy industry believed the environmental and animal welfare record of its farmers was the equal of any in the world.

Beef + Lamb NZ’s general manager for policy and advocacy Dave Harrison says he would have concerns with the commission’s proposal if the British government took it to mean that NZ farmers must follow its welfare and environmental regulations to the letter to qualify for tariff reductions in the UK market.

In the meantime, Harrison was encouraged to hear that the UK had adopted the NZ-EU Veterinary Agreement as a template in its Brexit negotiations with the EU.

The long-standing agreement meant the EU treated NZ’s regulation of food safety standards in processing plants as equivalent to their own where they were proven to produce the same outcomes.

The fact that the UK was using it as a template in its negotiations with the EU augured well for its future dealings with NZ.

“If the UK follows through with that philosophy around equivalent outcomes, rather than prescribing how things need to be done – and bearing in mind that part of the reason for Brexit was to get away from prescribing how things need to be done, and moving towards an outcomes based approach – if the talk is walked then yes, absolutely (the commission’s proposal) is a good thing for us,” Harrison said.

“But it has got to be turned into action and something that we can see in terms of offers being given.

“If that were the case then we would warmly welcome it, but we have yet to see it.”

Negotiations for a UK-NZ free trade deal are ongoing.

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