Australian deal could set a worrying precedent for Scottish farmers – The Scottish Farmer

Credit: Original article can be found here

FUTURE TRADE deals could impact the UK’s domestic market, even if imports are in small volumes.

Quality Meat Scotland has warned that offering favourable terms such as zero tariff / zero quota deal with Australia could set a precedent for trade negotiations with other big agricultural exporting nations.

“With the UK and Australia entering the closing stages of negotiations on a free trade agreement and increased beef market access being a key offensive trade interest for the Australian side, one concern for many actors within the UK beef supply chain is that a zero tariff zero quota deal would make the UK a much brighter prospect for Australian exporters, who would then find it economic to scale up their supply chains which are compliant with UK import controls,” stressed QMS senior economics analyst, Iain Macdonald.

“Given that the UK is also at a late stage of talks with New Zealand, in negotiations with the USA, and consulting on updating continuity EU agreements with Canada and Mexico, there must also be a concern that offering such favourable terms to Australia would set a precedent for trade talks with other major agricultural exporting nations.”

Despite being a net importer overall, UK traders export products to countries with stronger demand than can be realised in the home market, such as lower value cuts of frozen beef to Hong Kong. Exports have averaged around 16% of annual production over the past decade, climbing to 18% in 2019 and 2020. Mr Mcdonald raised concerns that trade negotiations offer limited opportunity for UK beef exports to increase to these markets, given their large domestic beef sectors and significant non-tariff barriers, including distance.

Due to the level of export activity, imports therefore make up a higher share of net beef supply than the gap between home production, he added, and total market supply would initially suggest. Over the past decade, import volumes have averaged around 30% of total UK beef market supply.