Beef: Modelling the impact of the UK-Switzerland FTA

The impact of the UK-Switzerland trade deal 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 the Free Trade Agreement (FTA), remain the same.

Key points

• The model suggests that UK beef exports to Switzerland will increase by about 800 t (an increase of 505% in percentage terms on the baseline used within the model)
• There will be no change in exports from Switzerland to the UK
• The model predicts that changes to production and price will be relatively small (less than 1%)

Summary of findings

The chosen network for beef consists of the UK, EU, USA, New Zealand/Australia and Switzerland. 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. Switzerland exports a limited amount of beef; however they do import beef, mainly from the EU, USA and Australia.

The model predicts a 505% increase in beef exports to Switzerland in a fully liberalised trade scenario, a rise of about 798 t. To put this into context the UK currently exports about 114 Kt of beef per year, with 158 t going to Switzerland.

It is worth noting that UK beef exports to Switzerland have significantly reduced since 2020. As discussed in other articles it is likely that the products exported to Switzerland will be high-quality cuts for foodservice. In order to send more beef to Switzerland there will be a slight reduction in beef sent to the EU, and total output sold by the UK beef sector will increase by 605 t.

There will be no change within the Swiss marketplace as the increase in UK exports will displace imports from the EU and Australia and New Zealand. There isn’t a great deal of change in the domestic marketplace.

Domestic production will increase by a small amount, 605 t, which is less than 1% in percentage terms. Table 1 details the impact on domestic production, prices, and the total amount of beef available in both countries.

Table 1. Impact on domestic production, prices and total amount of beef available in both countries

Considerations

The analysis is based on full liberalisation. Switzerland is a highly protectionist country with high tariffs on goods, especially meat and dairy.

There are currently tariffs on beef exports to Switzerland, and negotiations may focus on reducing these not eliminating completely.

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 FTA 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.

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Economic modelling of the beef, sheep, dairy and pork sectors