Saturday, March 30, 2024

No-deal will shut export gate

Avatar photo
New Zealand’s export gateway to Europe via Britain will close with a no-deal Brexit, Kiwi red meat sector Brexit representative Jeff Grant says.
Reading Time: 2 minutes

NZ sees Britain as a natural entry point for trade with the European Union, especially for small businesses that can’t afford to have a foot in both markets.

But if there is no deal by October 31 that gateway will be jeopardised.    

The odds are it will be a no-deal Brexit, Grant said.

“And that will have serious implications, particularly for the red meat industry.

“Commercial risk management is going to be very important to negotiate trade deals with the United Kingdom in years to come,” Grant told the Red Meat Sector conference.

“It’s a bugger’s muddle – predict anything on what the model might look like going forward and there’s a 50% chance of being right.

“There are no experts and there is no model.

“The reality is most people are trying to work out how they got there and where they may go.”

Britain has debated its membership since joining the EU in 1973.

In the 2016 referendum 52% of people voted to leave the EU.

Of the 650 current MPs, 70% voted to remain.

“Hence the problem,” Grant said.

“They are not particularly interested in the way they leave.”

Grant said the process isn’t what the exit argument is about. It’s about tribal politics in Westminster.

“In the best interests of the country for us was not to get caught in a bind, it needed a circuit breaker.

“We got that last month in Boris Johnson. 

“I’m not saying he’s right or wrong but the simplicity of his message has some breakthrough. We have the circuit breaker,” Grant said,

“He’s turned it back on the Europeans. He’s strongly argued no-deal and an exit will take place if no change in the withdrawal agreement.”

Grant predicts a 60-70% chance of a crash-out no-deal on October 31.

“There’s a 20% chance they’ll give Boris (Johnson) the finger, my figures only.

“There’s a 30% chance, I think, the public reaction will be quite clear blocking him out. I can’t see him having the ability.”

Then there’s 30 Tory MPs saying they will bring the Government down if they don’t stop a no-deal scenario.

The election option is very strong across a mix of the options.

“It’s a big risk but I can’t see him doing anything before October 31.”

The NZ red meat sector has referred the split of its quota between the EU and Britain to the World Trade Organisation Geneva.

“NZ is seen as leading this debate in respect to WTO Geneva.

“This is fundamental. We may lose it there but I think of all the issues we are dealing with we need to keep this drive.

“The impact of a no-deal will be brutal,” Grant said.

Meat access, geographic indicators, standards and environment will come under pressure in an EU28 free-trade deal.

Beef exports will probably be similar to a 20% tariff.

Grant said consumer patterns continue to change and are supermarket-driven rather than consumer-driven.

While 38% of all food consumed is outside of the home, 86% of consumers buying for home cooking walk into the supermarket and buy on price.

“It’s non-government organisations who do these surveys and they are based on rankings so it’s all panic about where they fit and that’s what drives it – not consumers.”

Consumption of lamb and beef has taken a hit in Europe and Britain with the heat wave slowing economies.

Total
0
Shares
People are also reading