27 Sep

'UK in ‘live debate’ over doubling of trade quotas after Brexit' Robert Wright and Jim Brunsden, FT

Countries including Australia and New Zealand are pushing the UK to open up its food market after Brexit and allow the same quota of low-tariff imports as they currently send to the whole of the EU.

Michael Gove, the environment secretary, has acknowledged that it is “no secret” that some countries were pushing for ambitious trade quotas with the UK, a prospect that might be welcomed by some of the government’s free trade advocates but one which would also force British farmers, for example, to compete with significant imports of lower-priced meat.

Steven Ciobo, Australia’s Minister for Trade, Tourism and Investment, said his country was keen to ensure post-Brexit arrangements led to no reduction in the value of existing commercial opportunities in the UK market. Essential stories related to this article Brexit Northern Ireland farmers call for five-year transition after Brexit Brexit UK farm growth hit as migrant workers fall after Brexit referendum Brexit Brexit talks resume after Theresa May’s ‘constructive’ shift “Currently, where a product is subject to a tariff quota, Australian exporters have the option of supplying the full quantity of the tariff quota into the UK market,” Mr Ciobo said. “Any change to that would represent a diminution in our current access. Australia has conveyed this view to the UK.”

Mr Gove told MPs on the environment, food and rural affairs select committee earlier this month that the idea was the subject of a “live debate” with several countries.

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“I don’t want to pre-empt some of the decisions that might be taken,” said Mr Gove, but added that one of his “principal concerns” was to “make sure we can get an outcome that is net positive for UK agriculture”. He said the idea, under which the UK would mirror the tariff rate quota of the entire EU bloc, was “what I imagine they would call in Only Fools and Horses a ‘double bubble’”.

Such a deal would resolve the problem of dividing up the quotas that govern the EU’s imports of some sensitive goods, mainly agricultural products, from some third-party countries.

The quotas, agreed in trade negotiations, allow a set quantity of a given product, such as Australian sheep meat, to be traded annually at a zero or reduced tariff in and out of the EU. Once the quota for a given year is exceeded, any further imports are charged at the full, steep tariff rate for imports set by the World Trade Organisation. Setting such quotas has historically been among the most difficult parts of negotiating international trade deals.

EU and UK officials have already held intensive negotiations on how to divide up tariff-rate quotas after Brexit. People involved in the talks, which are taking place as part of the UK’s Brexit negotiations with Brussels, said that both sides want to reach a deal on a “common methodology” that they could then take to the WTO for approval. The EU wants to avoid a situation where its trading partners demand compensation because the UK’s departure makes their access quotas less valuable than in the past — for example, in cases where a product they export with low tariffs is particularly popular in the UK.

One European official said this month that the talks were progressing well, and that there was a good chance that the two sides would secure a joint position. But countries that export to the EU have said they could lose out if the EU and UK split the existing tariff-rate quotas.

David Evans, New Zealand's deputy high commissioner in London, said his country wanted to be treated fairly and to be no worse off after Brexit.

Julian Sturdy, the Conservative MP for York Outer, who asked Mr Gove about the issue, expressed concern that a surge of new meat imports could harm upland UK sheep farmers. Mr Sturdy said upland farmers, who depend heavily on sales of sheep meat, were already struggling to compete. “I think that would put huge pressure on them,” Mr Sturdy said.

Daniel Hannan, a Conservative member of the European Parliament, who is an enthusiastic supporter of free trade, greeted the idea as a potential step towards liberalisation. “Cheap imports are a good thing because they mean that people have more time and more money to devote to other things [than food],” Mr Hannan said.

The UK Department for International Trade said Britain wanted to ensure a smooth transition out of the EU that minimised disruption to the country’s trading relationships. “Tariff-rate quotas are one of the issues that we are discussing in a co-operative and transparent way with WTO members,” a department spokesperson said.

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