Friday, March 29, 2024

Last-gasp deal likely, Grant says

Neal Wallace
It could all happen at the eleventh hour but New Zealand’s red meat sector Brexit representative believes agreement will be reached for an orderly exit of Britain from the European Union.
Reading Time: 2 minutes

Jeff Grant, who has been based in London since July monitoring the exit negotiations on behalf of NZ’s red meat sector, said while he is optimistic an exit agreement will be reached, the British economy has been damaged.

The Brexit process is costing it $1 billion a week and it still has to pay the EU an exit fee.

The uncertainty is causing supermarkets to stockpile dried food and has caused firms such as Jaguar and BMW to decide to stop working for several weeks around the March 29 exit date, fearing the absence of an agreement will disrupt cross-border trade.

Grant said many observers believe there will be either a no deal or a hard Brexit deal – where Britain becomes a separate entity or a third country with all EU links severed.

His optimism is based on recent favourable comments from British politicians.

He concedes it is a view not shared by all but notes the political landscape is constantly shifting, which also gave rise to some cynicism.

“Both sides, especially France but also the UK Parliament, say a no-deal is better than a bad deal and that’s quote worrying.” 

With less than 170 days before the UK exit any deal, which still has to be ratified by the British Parliament, will be achieved at the last minute.

“On that basis it is going to be, as you often get with these things, an eleventh-hour settlement which does not give you details but gives you options for what you do during the transition period.”

A 21-month transition period will follow the March 29 exit, allowing new systems and structures to be put in place.

A soft Brexit would preserve frictionless borders, which is generally desirable.

He said 65% of production from the Republic of Ireland, which stays an EU member, is trucked to Europe through the UK in a borderless process.

If borders are imposed, those trucks would have to find an alternative route to avoid disrupting delivery trips.

If each truck now going to Europe via Dover was stopped for a six-minute customs check the queue would be backed up to London within 12 hours.

Retaining frictionless borders would, however, allow the release of the large number of refugees on the French coast, stopped from travelling to Britain because of EU policy.

Britain and the EU have proposed NZ’s 228,000 sheep meat quota be split evenly but NZ says that goes against World Trade Organisation rules and NZ is taking the case to the WTO.

Grant said the proposal would remove trade flexibility, which would be an issue if there is no deal and the EU imposes tariffs on the 65,000 tonnes of lamb the UK exports to France each year.

There has been talk tariffs could be as high as 60%, which would collapse the trade and the British red meat market because its meat processing plants are not licensed to export to other markets such as China.

It is not an issue particular to red meat.

Grant said just 35% of chicken produced in Britain is eaten there with up to 10,000 tonnes exported to Europe.

If a deal cannot be reached there has been talk of burying the unsellable meat because all the rendering plants were closed as a measure to prevent the re-emergence of bovine spongiform encephalopathy (BSE), he said.

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