Thursday, 3 June 2021
In the first edition of our rebooted trade and policy blog, AHDB’s Tania Gesto-Casás discusses the experience and learnings of meat exporters from different European countries so far since launching into our new trading relationship.
The end of 2020 brought about fundamental change for the EU-UK trade relationship. The trade deal announced on Christmas Eve provided for certain preferential arrangements but the nature of the relationship changed substantially when the transition period was over. To understand how this difference has impacted the activities of red meat traders in Europe, AHDB gathered experts from both sides of the Channel and the island of Ireland, who took stock with us of the first three months of the new post-Brexit era.
Interestingly, all of them had a very similar initial assessment of the EU-UK Trade and Cooperation Agreement. As Knud Buhl (Danish Bacon & Meat Council) put it, “it’s a bit like when Winston Churchill talked about democracy: it’s not an ideal system but it’s the best available alternative.” Tariffs and quotas have been avoided and that is a major achievement because the tariff bill on meat products would have been a colossal impediment towards trade. Still, as Cormac Healy (Meat Industry Ireland) added, a free trade deal does not mean frictionless trade.
For British exporters, like Rizvan Khalid (Euro Quality Lambs), trying to adjust to the new relationship has been quite difficult. There are new requirements in terms of customs declarations, inspections and checks. Going through the border takes now longer, making British products less competitive. On top of that, all this paperwork comes at a cost regardless of whether you sell one pallet or one load, so smaller operators have been disproportionately affected.
The situation is different in Northern Ireland (NI) due to the Protocol. Their meat industry gets unfettered access to the Great Britain market and the EU Single Market. On the downside, they are effectively following the EU rulebook. Ian Stevenson (the Livestock and Meat Commission for Northern Ireland) explained how this is causing significant disruption to certain types of products of animal origin coming into NI from Great Britain, even with the existing grace periods in place. However, NI red meat businesses have invested a lot of time and effort in training and worked closely with the authorities, so Ian said they are adapting fairly well to the new arrangements, despite the extra costs.
While European exporters have not yet seen the full extent of changes due to the phased approach to import controls adopted by the UK Government, the new customs procedures have also increased bureaucracy and costs for them. They have also realised that the new trading scenario, with the UK outside of the Single Market, is not one that lends itself to the fresh & chilled, just-in-time trade we have developed in the meat sector. This has created a series of unexpected anomalies that nobody had thought about because businesses never had a true transition period to assess and adapt to the new arrangements before having to implement them.
Looking at the future, there was again a general agreement that while trading conditions have changed, the market remains the same – the UK has not moved location after all. UK operators are keen to see new markets opened up in other parts of the world but they recognise that those will never replace the fresh, chilled trade with the EU market. Similarly, our European colleagues agreed that the UK will continue to be a very important market for the EU, both from an import and export perspective, at least for the short to medium term. The longer term? Harder to predict but a key factor will be the trade agreements the UK reaches with other global suppliers of meat, which could potentially increase competition in the UK market. One to watch for everyone.