Beef: modelling the impact of the UK’s accession to CPTPP

The impact of the UK’s accession to CPTPP was examined for beef, looking at the changes expected after the deal comes into force. This aspect of the modelling work assumes all other factors, except succession, remain the same.

Key points for the beef sector were:

The model suggests that CPTPP beef exports to the UK will increase by about 668 t (an increase of 49% in percentage terms on the baseline used within the model)
The model suggests that UK beef exports to CPTPP will increase by about 1,404 t (an increase of 59.6% in percentage terms on the baseline used within the model)
The model predicts that changes to production and price will be relatively small (less than 1%)

The chosen network for beef consists of the UK, EU, USA, New Zealand/Australia, and the rest of CPTPP. The UK and EU are key trading partners of beef, with most UK imports originating from Ireland. The USA is a major trader of beef, mainly exporting to Canada and Mexico, along with Asian markets, especially China and Japan. New Zealand and Australia are also major beef exporters, with the USA and China the key trading partners. Canada and Mexico are the two biggest beef exporters in the CPTPP group, mainly to the USA and Japan. A key consideration when interpreting the results is that the model cannot determine which of the nine countries within the rest of CPTPP node will be importing or exporting the beef.

As shown in Figure 1 the model predicts a 50% increase in beef exports to the UK in a fully liberalised trade scenario, a rise of about 668 t. To put this into context, the UK imports about 238 Kt of fresh and frozen beef per year. It is worth noting that the UK has negotiated an inward beef tariff rate quota (TRQ) for all CPTPP countries. The TRQ will start at 2.6 Kt, increasing in equal increments to 13 Kt by year 10 of the agreement. Current CPTPP exports to the UK are 1,356 t.

As discussed in previous modelling analysis, it is likely that any new beef imports will compete for space in the market, specifically the foodservice sector. With this in mind, the model predicts these will displace current imports, with the EU showing a decline of 727 t.

Figure 1. Modelling results impacts to beef trade

Note: No connecting arrows indicates minimal change in trade levels.

The model predicts a 60% increase in beef exports from the UK to CPTPP countries in a fully liberalised scenario. In volume terms, this is an increase of about 1,404 t. To put this into context, the UK currently exports about 118 Kt of fresh and frozen beef per year, with 2,355 t going to CPTPP countries. In order to send more beef to CPTPP, there will be a reduction in UK exports to the EU of 256 t, and the total output sold by the UK beef sector will increase by 667 t.

Work carried out by AHDB identified Canada, Chile and Vietnam as good potential beef export opportunities, with Singapore and Japan having the best prospects.

There isn’t a great deal of change in the domestic marketplace. As discussed above, the domestic production will increase by a small amount, 667 t, which is less than 1% in percentage terms. There is a very small reduction in retail prices of less than 1%. Table 1 details the impact on domestic production, prices, and the total amount of beef available in both countries.

Table 1. Detailed beef results

	UK	The rest of CPTPP
Domestic production	+0.07% (+667 t)	+0.01% (+313 t)
Price paid to producers	No change	No change
Total beef sold in the domestic market (incl imports)	+0.05% (+550 t)	+0.02% (+854 t)
Retail price	-0.05%	No change

Considerations

The analysis is based on full liberalisation, but, as previously discussed, the UK has negotiated a TRQ for beef. Therefore, the CPTPP countries will only be able to import a specific amount of beef tariff-free. The TRQ will start at 2.6 Kt and increase in equal increments to 13 Kt by year 10 of the agreement. The modelling predicts that CPTPP exports to the UK will increase by 668 t, which would be a fraction of the TRQ.

Trade with China is another key consideration. New Zealand, Australia and Canada export a significant amount of beef to China. This was discussed in detail in the New Zealand and Australia impact assessments, but if these trading arrangements changed, we would expect the product to be diverted elsewhere in the global marketplace, including the UK. However, increasing trade from Canada would be capped due to the TRQ.

Limitations of modelling results

There are a number of caveats to these results. Like other economic models, the trade network model is not a prediction or forecast and assumes all factors other than UK accession to CPTPP remain equal. This is unrealistic in a global economy but is an essential assumption for modelling due to the complexity of predicting future changes. What the network model can do, though, is examine specific ‘what if’ scenarios and this is something that AHDB will be analysing going forward.

Like other economic models, the trade network model treats all products in a category as homogenous. In reality, we know that there are varying levels of demand for different cuts of beef in each market. The model treats all cuts as the same, and therefore the impact of carcase balance must be considered alongside the results. As such, our interpretation considers the modelling results within the context of the other analysis and findings.

The model does not take into account Sanitary and Phytosanitary (SPS) limitations such as Export Health Certificates (EHCs) and other trade barriers, such as the ban on hormone-treated beef entering the UK.

Back to

Economic overview

UK–CPTPP hub page