Food industry reacts to UK-NZ trade deal

Food industry reacts to UK-NZ trade deal

Trade bodies from across the UK food industry have spoken out about the signing of the free trade agreement (FTA) between the UK and New Zealand, producing a mixed reaction.

This follows the news on Monday, 28th February, when International Trade Secretary Anne-Marie Trevelyan signed a UK-New Zealand free trade deal during a meeting with New Zealand minister Damien O’Connor in London.

According to analysis by the Agriculture and Horticulture Development Board (AHDB), NZ has agreed to eliminate all tariffs on UK products entering the country from Day 1 of the agreement. In return, the UK has agreed to eliminate 96.7% of tariffs for NZ products entering the UK from Day 1.

Importantly, the exceptions are the UK’s sensitive agricultural products, including beef, sheepmeat and cheese. For these products, a transitional tariff rate quota (TRQ) will be applied.

AHDB highlighted there is also no recognition of products of geographical indication (GIs) within the FTA, but there is a commitment that if NZ were to implement such a scheme domestically, that the UK would also benefit from similar protection.

Next steps will require scrutiny of the agreement by the Trade and Agriculture Commission for a three-month period, then scrutiny by government and select committees before the process of ratification is triggered. AHDB said that this is likely to take until the middle of 2023 to allow time for the necessary legislation to be in place ahead of ratification of the deal.

AHDB, in partnership with Harper Adams University, is expected to publish a report on the implications of the new trade deal later this year.

“Margins likely to tighten”

National Farmers’ Union (NFU) president Minette Batters said: “As expected, this deal takes the same approach as the UK-Australia deal in eliminating tariffs for agricultural products, meaning that even for sensitive sectors like beef and lamb, dairy and horticulture, in time there will be no limit to the amount of goods New Zealand can export to the UK.”

According to Batters, the “real risk” to UK farmers and consumers is not the individual trade deals themselves but the cumulative impact of each deal when added together.

She continued: “Once again, there appears to be extremely little in this New Zealand trade deal to benefit British farmers. UK farm businesses face significantly higher costs of production than farmers in New Zealand, and margins are likely to tighten further in the face of rising input costs, higher energy bills and labour shortages.”

Batters said that the government is now asking British farmers to “go toe-to-toe with some of the most export-orientated farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.”

She added: “There remains an urgent need for government to have a coherent approach across all of its departments to focus on UK farming’s productivity, as well as recognise and remedy the contradictions within current domestic policy, which is still woefully sparse on the detail of how farmers will be supported to become competitive food producers at a time when food security is an increasingly important concern.”

“New opportunities”

Dominic Goudie, head of international trade at the Food and Drink Federation, said: “A trade deal with New Zealand is a welcome one for the UK’s food and drink manufacturers. Already exports of chocolate, coffee, biscuits and soft drinks are worth around £10 million a year and removing tariffs on these products will drive significant further growth as UK production becomes more competitive in a global market.”

Goudie added: “Industry and government should now work in close partnership via the Food and Drink Export Council to ensure manufacturers can take full advantage of the new opportunities that the deal will deliver.”

The International Meat Trade Association (IMTA) also welcomed the FTA, stating that the deal will “only serve to strengthen the enduring and historic trade in meat” between the two countries.

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