Ed's Brexit round-up - WTO Special
13th Oct 2017 / By Ed Barker
On Thursday, the UK Government formally contracted the World Trade Organisation to outline its approach to becoming a full WTO member, outside of the EU. Part of this process requires the UK and EU establish what Tariff Rate Quotas (TRQs) should be set by them both after Brexit. TRQs are commonly used around the world, and in short, they are the amounts of product that any country can export to another country without paying the tariff rate.
In the lamb sector, for example, there is a large tariff free quota imported into the EU from New Zealand that almost exclusively goes to the UK. In other products, imports can come into the EU tariff free and go to a number of destinations. These TRQs are set usually on products that are already produced in the EU as a means to protect domestic producers from being flooded by cheaper imports.
How is trade in pig products in the EU set?
As it is, the EU pig sector is very unique in that we import very little – if any – non-EU pig products into the EU (and therefore the UK). Even though there are TRQs available to non-EU countries to export pig products to the EU, they are still not used, largely because of the welfare, production and herd health standards set by the EU on any imports. Because the EU is self-sufficient in pig products, prices are also difficult for non-EU countries to compete with on a level playing field.
What does this mean for the UK pig sector?
The NPA has been working extensively alongside Defra and DiT to work out how the UK can have tariff levels in place for pig products when it becomes a member of the WTO. Because the level of non-EU imports in pig products to the UK are very low, the NPA has stated that any future UK TRQs in pig products should reflect current, and historic, low import levels from outside the EU.
This is an objective and fair way of apportioning TRQs in our view, and would not allow a sudden high volume of non-EU pigmeat to be imported to the UK without at least having large tariffs applied to it. Naturally, we would like to see that the UK imposes relevant standards on imported products equivalent to our own.
However from day one of the UK being outside the EU, this allows a level of tariff protection before such standards are worked out. Under possible Free Trade Agreements with the EU, USA or Canada, the UK could allow zero tariffs to be in place, so there is still much more work to be done in ensuring a fair playing field for members is in place.