No reduction of UK sheep meat tariffs if there is a hard Brexit

Thursday, 14 March 2019

By Rebecca Wright

On Wednesday 13 March, the UK Department for International Trade published a document detailing the UK most favoured nation (MFN) import tariffs if there is a ‘no-deal Brexit’. These tariffs are currently draft and subject to change, and still need parliamentary approval.

Imports tariffs

The UK will not be reducing sheep meat tariffs from the current EU level if there is a no-deal or ‘hard Brexit’. This suggests there will be little change in the amount of sheep meat imported from non-EU countries that do not currently have a tariff rate quota giving them preferential access, such as New Zealand. However, there is likely to be a reduction in the volume of sheep meat imported from the EU. During both 2017 and 2018, the UK imported around 18,500 tonnes cwe of fresh/frozen sheep meat from the EU, out of total UK imports of just over 91,600 tonnes cwe in 2018 and 95,000 tonnes in 2017, according to HMRC data.

If 2017 trade were to be repeated with the new UK tariffs, the average effective tariff EU exports to the UK would be just under 57% of the price, and the duties would amount to around €43.5 million.

Some nations have pre-existing quotas that are going to be split between the UK and the EU after Brexit. These quotas have already have zero rate tariff. The two largest quotas are allocated to New Zealand (225,254 tonnes cwe) and Australia (19,186 tonnes cwe). After Brexit, the UK share of these quotas will be 50% and 80% respectively.

Of course it is not just meat tariffs that were released. The release also gave details of tariffs for all products (not just agriculture), with a zero-tariff rate for cereals if there is a no-deal Brexit. AHDB Cereals and Oilseeds’ Grain Market Daily commented that the removal of the tariffs could put pressure on the domestic grain price.

Export tariffs

The UK will face tariffs rates when sending sheep meat to the EU if there is a no-deal Brexit. In 2018 the UK exported around 82,500 tonnes cwe to the EU and in 2017 88,000 tonnes cwe. In 2017, if these tariffs had been applied to UK exports to the EU, they would have totalled around €155 million, effectively a price increase of 46%. This will inevitably have an effect on the UK sheep meat industry, how much will depend on how New Zealand exporters behave post-Brexit.

The UK Government has released a statement saying they are committed to avoiding a ‘hard border’ as well honouring the Belfast Agreement. It states that the will not introduce new checks, or controls on goods at the land border between Ireland and Northern Ireland with no customs requirements for nearly all goods. Click here to read the full UK Government statement.

While it may offer some comfort to the industry that sheep meat tariffs will be imposed, there remains much uncertainty for the industry ahead, with the UK facing tariffs in order to access the EU market if there is no-deal Brexit.

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