THE contrast between the terms of the trade deals struck recently by the UK and European Union with New Zealand, highlighted at the weekend by Scottish Rural Affairs Secretary Mairi Gougeon and trade minister Ivan McKee, is striking indeed.
The pair highlight, specifically, the huge difference in the degree of access to UK and EU markets for New Zealand beef, in a letter to UK minister for trade policy Penny Mordaunt.
Anyone who has observed the seeming Tory desperation to do trade deals post-Brexit will be able to guess, if they do not already know, that the UK has agreed to much greater access for beef imports from New Zealand than the EU.
The farming sector in Scotland and elsewhere in the UK highlighted fears over the detrimental impact of allowing large quantities of New Zealand meat to be exported to the UK. These worries were voiced in plenty of time for the UK Government to take them on board before sealing the deal with New Zealand in February.
Ms Gougeon has also been among those to highlight similar fears over the UK’s trade deal with Australia.
Not surprisingly, however, all such representations seemed to be ignored, as the Conservatives raced to seal trade deals, the overall net benefit of which is absolutely tiny relative to what the UK has lost by leaving the EU and single market.
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In their letter to Ms Mordaunt, published on Sunday, Ms Gougeon and Mr McKee say: “We have now seen the detail of the recently completed FTA (free trade agreement) between the EU and New Zealand. The difference in outcomes is stark. While the UK Government agreed to allow unlimited quantities of beef, tariff-free, into the UK after 15 years, the EU-New Zealand FTA will maintain quotas permanently and apply a 7.5% tariff.
“In addition the quotas that New Zealand has secured, in its FTA with the UK, are much higher than those in its agreement with the EU. In the first year of the FTA, the UK will allow 12,000 tonnes of New Zealand beef into the UK, while the EU will allow 3,333 tonnes – for the entire EU-27. By year 15, the UK Government will allow 60,000 tonnes of New Zealand beef into the UK, and after that an unlimited quantity, while the EU will cap imports at 10,000 tonnes, and still apply a 7.5% tariff.”
The two Scottish ministers note they have “consistently raised concerns at the lack of a level playing field between Scottish and New Zealand farmers, who can benefit from larger economies of scale”.
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They add: “It is notable that the EU-New Zealand FTA specifically excludes beef that is produced on commercial feedlots from benefiting from the preferential terms of this agreement. As concerns about fair competition are well known, why could the UK Government not agree a similar condition with New Zealand as part of its FTA negotiations?
“For sheepmeat, it is a similar story. The UK-New Zealand FTA allows 50,000 tonnes of sheepmeat into the UK by year 15, with no limit on imports after that. The EU-New Zealand FTA however allows a maximum of 38,000 tonnes. In both cases this is in addition to the current WTO (World Trade Organisation) country-specific quota for sheepmeat imports from New Zealand, which already provides significant market access for New Zealand producers.”
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Ms Gougeon and Mr McKee declare, in their letter to Ms Mordaunt, that “for other agri-food imports such as butter and cheese, the EU has again secured a better deal than the UK”.
They point out: “In both cases the EU has maintained import quotas, where the UK Government has abandoned them, and in the case of butter, the EU also retains an import tariff.”
The Scottish ministers add: “In return for this limited access to the EU market, New Zealand is offering the EU full tariff liberalisation on EU exports to New Zealand from day one, which is the same outcome as the UK Government secured for UK exports. So it seems clear that the EU has secured the same market access for its exporters at a much lower cost to its domestic producers.”
The pair also highlight the EU’s success, in its trade deal with New Zealand concluded in June, in gaining recognition of its geographical indications for agri-food.
And they express hopes that the UK Government will now act to protect the provenance of “world-renowned” Scottish products.
Ms Gougeon and Mr McKee say in their letter: “As you know geographical indications (GIs) are an area of considerable importance for Scotland as they protect the provenance of our world-renowned products, such as Scotch Beef and Scottish Farmed Salmon. The UK Government did not secure recognition of agri-food GIs in its agreement with New Zealand, however the EU has now succeeded in gaining recognition of its agri-food GIs in its FTA.
“This agreement should trigger the review clause on GIs in the UK-New Zealand FTA, which allowed for discussions on GIs to be reopened should New Zealand agree to changes to its GI scheme in an FTA with another party. This opens up the possibility that UK GIs will now be included in the UK-New Zealand FTA. We look forward to early engagement on this, to ensure that all Scottish GIs are put forward to be included in this FTA in future.”
Ms Gougeon and Mr McKee sum up the overall position well when they note: “It is clear from looking at the outcome of the EU-New Zealand negotiations that they have succeeded in getting an agreement that delivers a similar level of benefit to the UK-New Zealand FTA, while maintaining stronger controls on agri-food imports and protections for domestic producers.”
They add: “Given the EU’s size and negotiating strength, this is perhaps not surprising, but it emphasises the futility and economic self-harm of the UK Government leaving the EU, making its own trade agreements, and then ending up with a worse deal than if we had stayed in the EU.”
“Futility” and “economic self-harm” sum it up well.
And the Scottish ministers conclude: “We would be interested to know what lessons the UK Government will learn from this experience; whether it will pay more attention to the results of scoping assessments when they highlight that sectors stand to lose out as a result of an FTA; and what mitigations and compensation it will put in place for economic sectors and communities that suffer as a result of the UK Government’s trade deals.”
Recent history would suggest the Tories will not learn any lessons, or pay much if any attention to analysis showing sectors stand to lose out.
And mitigations and compensation look unlikely as the Conservative Government ploughs on with its Brexit crusade.
Only last month, as it issued a withering assessment of the UK’s trade agreement with Australia, the House of Commons’ International Trade Committee warned the UK Government against “overselling the benefits of trade deals” as it called for “a full assessment of the winners and losers across all economic sectors and nations of the UK”.
Particularly notable was the declaration from committee chairman and Scottish National Party MP Angus Brendan MacNeil, as the assessment of the deal was published, that the UK Government “must level with the public”.
He added: “This trade deal will not have the transformative effects ministers would like to claim...
“As the first wholly new trade deal since Brexit, this agreement sets a precedent for the future. It is vital that the Government learns from this experience and negotiates harder next time around to maximise gains and minimise losses for all economic sectors and parts of the UK.”
Ms Gougeon and Mr McKee provide a very plain illustration of how much better a deal the huge New Zealand farming sector got out of the UK than the EU, in their letter to Ms Mordaunt.
They point out that it is “telling to look at the industry reaction in New Zealand”.
The pair note that New Zealand’s Meat Industry Association said of the EU-New Zealand FTA: “We are extremely disappointed that this agreement does not deliver commercially meaningful access for our exporters, in particular for beef.”
In contrast, the two Scottish ministers note, the industry association said of the UK-New Zealand FTA: “This deal will deliver a major boost for sheep and beef farmers and exporters.”
It seems the Conservative Government is rightly fast earning a reputation for getting nowhere near striking a hard bargain on trade deals, and for not learning lessons or listening. We should not really be surprised by this lamentable performance, however, given its seeming desperation to do deals with anyone other than the EU, as it has seemingly pursued the impossible task of glossing over its Brexit catastrophe.
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