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Will no deal tariff regime protect UK pig industry?

27th Feb 2019 / By Alistair Driver

The prospects of the UK leaving the EU without a deal in place at the end of March have receded. But that does not mean the threat of a no deal has gone away.

may brexitTheresa May bowed to the inevitable yesterday when she promised MPs two votes if they reject her Withdrawal Agreement when it goes to another meaningful vote by March 12. The first would be on whether to leave the EU without a deal in place. This would almost certainly be rejected, in which case there would be another vote on whether to delay Brexit, which the make-up of the Commons suggests would be accepted.

While the Prime Minister continues to maintain that the UK remains ‘firmly on course’ to leave the EU with a deal on March 29, a delay now looks an increasingly realistic outcome.

Nonetheless, a no deal can still not be ruled out, particularly at the end of any extension, which Mrs May has said should not go beyond the end of June and should be a one-off.

Tariff regime

Meanwhile, we still await formal confirmation of the UK’s position on tariffs in the event of a Brexit no deal.

While playing down suggestions of a Cabinet rift, Defra Secretary Michael Gove made it clear at last week’s NFU conference in Birmingham that he had secured protection for farmers in the Government’s no deal import tariff plans.

Highlighting the NFU’s calls for tariffs on sheepmeat, beef, poultry, dairy and pig meat in order to safeguard domestic production, he told the conference: “Your concerns have been heard.”

The Financial Times reported on Tuesday that it has seen the final tariff plan, endorsed by Prime Minister Theresa May, set out in a memo from the Cabinet Office to Whitehall departments.

It appears to reinforce the promises Mr Gove was making about supporting the most vulnerable sectors of UK agriculture. The Government would impose the same tariffs rates currently imposed on beef and lamb from outside the EU on all such imports, whether from Europe or beyond. The UK would retain some duties on pork products, milk and cheese and set tariffs on some products such as sugar.

What it means for pork

NPA senior policy advisor Ed Barker, who has been in regular discussions with the Government over its tariff plans for pork, said the intention was to cause minimum disruption by trying to maintain import volumes at similar levels to those seen today.

“My understanding is that, in the case of pork, given that the UK currently imports large volumes tariff free from the EU, quotas would be set to allow similar tariff-free import volumes, but this would be open to exporters from all around the world, not just the EU. Tariffs would then be imposed once these quotas have been reached.

"Crucially, the UK will commit to keeping the same standards in place as the EU – which should prevent the possibility of illegal imports from outside of the EU.”

“It is well-documented that some within Government were keen to keep import tariffs on food to a minimum to keep a lid on food prices. We need to see the final details, but the approach taken appears to be sensible.”

However, UK pork producers are likely to face full WTO tariffs on exports, which will affect the industry’s competitiveness on the EU and disrupt trade, particularly in terms of the vital cull sow trade to Germany and Belgium.

"There will be tariffs on exports of cull sows on day one but just not as much as the maximum applied tariff rate. The EU has discretionary amounts and nothing suggests they are going to reduce them to zero just for UK benefit," Ed said.