NOTICE: We are delighted that the recent Agreement in Principle (AIP) has been signed between New Zealand and the UK.
It will significantly benefit farmers, processors, exporters and the New Zealand economy with higher export revenues once the free trade agreement is signed and ratified.
It has taken a while, and a lot of hard work by B + LNZ on behalf of the farmers, in partnership with the MIA to get to this point. We are very excited about this important step in the substantial conclusion of the negotiation of an FTA between the two countries.
The AIP represents an important boost for New Zealand’s red meat sector, providing better access to high-quality New Zealand beef and more certainty for sheepmeat exports.
The agreement, once signed and ratified, will allow New Zealand beef and sheepmeat exports to initially enter the UK under a tariff rate quota (TRQ) regime.
For beef, it will start from a quota of 12,000 tonnes, with a quota rate of zero (compared to the quota of 454 tonnes we have today). This will save New Zealand farmers around $ 44 million per year in tariffs every year from the first year.
Volumes will then increase to 60,000 tonnes over 15 years, after which unlimited quantities of beef will be able to enter the UK tariff and duty free.
For the first 10 years, any beef exported in excess of the quota will be subject to full tariffs of up to 70%. During years 11 to 15, any beef exported beyond the safeguard will only be subject to a 20% duty.
For sheepmeat, New Zealand already has access to 114,000 tonnes thanks to our quotas at the World Trade Organization. This FTA will give us an additional quota of 35,000 tonnes for the first 4 years, after which it will increase to an additional 50,000 tonnes. Like beef, after the 15th year we will have duty-free and duty-free access for unlimited quantities.
Co-products – such as processed meats, pet foods and offal – will have their tariffs removed on entry when the agreement comes into force, meaning that additional value can be added to the price. carcass. It will come back to processors and back into the pockets of farmers.
After the UK left the EU, New Zealand’s 1,300 tonne quota of beef was split between the UK and the EU, leaving New Zealand with only 454 tonnes of access beef in the UK. Outside of this quota, New Zealand beef exports were subject to tariffs of up to 70%, meaning that there was virtually no over-quota trade. This announcement is a significant improvement to that access. Improved access will allow companies to deepen and expand their relationships and, most importantly, to compete on a level playing field with our international competitors.
It gives UK consumers access to the best seasonal produce all around. Particularly during peak periods such as Easter and Christmas which fall during the UK’s off-season meat production window.
We understand that there is a significant demand for New Zealand beef in the UK. With this new and improved access, companies will be able to establish business relationships. Previously, beef quota volumes were too low for year round supply, which was not possible.
Farmers constantly tell us that market access is one of the most important priorities they want Beef + Lamb New Zealand (B + LNZ) to work on. B + LNZ, together with the Meat Industry Association (MIA), has been in intensive negotiations for several years to engage with and support the government on this deal and we are really happy with the outcome today.
Andrew Morrison is President of Beef + Lamb NZ.