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Lack of no-deal tariff protection will open up UK pork market to the US and Canada

The UK pork market needs greater tariff protection in a no-deal Brexit to prevent British pig producers from being undercut by US and Canadian imports, says National Pig Association senior policy adviser Ed Barker.

With nearly two months until the end of October, all sectors are nervously eyeing their fate – and the British pig sector is no exception.


In March this year, the Government released its tariff schedules on imported animal products in the event of no deal.


Where the beef, lamb and poultry sectors would see significant import protections in place, and the egg and cereals sectors would have none at all, the pig sector would get what we can best describe as modest tariffs.


Averages tariffs would range from €9.4/100kg on fresh pork, to €20.6/100kg on fresh ham, with bacon somewhere in between.


In easier to understand terms, somewhere between 3-5 per cent, according to AHDB Pork.




Most significantly, these tariffs are not set under quota, something which is the case for other sectors.


This is significant, because in a no-deal scenario, every importing country is treated equally; Denmark would have the same access to our market as the USA.


As a result, it could be very easy for another country to buy up huge market share in the UK pork market, without restriction. This is of great concern.


AHDB analysis in March showed that pig prices in the US and Canada are very weak in comparison to the UK, averaging around 99p/kg in the US and around 92p/kg in Canada.


These returns are 43p/kg and 47p/kg below Great Britain, and it is therefore easy to see how a small tariff of 3-5 per cent and shipping costs could be absorbed into their costs of exporting, allowing a healthy profit.




The total cost could be around 33-39p/kg lower from the USA and Canada than British prices.


This is hardly insignificant, and leaves UK producers at the mercy of unlimited imports from outside the EU.


We have had assurance from Defra that the UK would insist on the same sanitary and phytosanitary (SPS) standards under World Trade Organisation (WTO) terms as the EU does in the event of no deal.


This would at least provide some protection from North American producers who use ractopamine, and who must demonstrate ractopamine-free pork in their exports to the EU.


However, given the margin that is on offer, the additional checks are arguably still worth it.




This is why we believe at the very least, there should be tariff rate quotas placed upon pork imports in the event of no deal which match existing trade flows.


Failure to do so could see severe and irreversible consequences, no matter how unintended they may be.


We must also remember the small matter of a trade ‘disagreement’ that is taking place between the USA and China – the net result being more US pork floating on world markets.


On the other side, we also have to consider exports.


As with all livestock sectors, the British pig sector would be majorly compromised if we are to lose EU market access due to prohibitively high tariffs and inspection processes in a no-deal scenario.




Last year, around half of all of our pork exports went to the EU, with a total value of around £200m.


Central to this is the cull sow trade, which has no other outlet than the EU market. We are not set up to slaughter and process sows here, nor do we have the market for sow meat.


Although exporters have looked outside of Europe for this trade, no customers have come forward.


The EU is our only realistic market for these animals, and a no-deal Brexit severely undermines that. We have, however, had a positive story to tell on exports outside of the EU.


With more and more demand from China for European pork, 2019 has been breaking all sorts of records for pork exports.




It does at least give us a blueprint for a more optimistic, longer-term trade balance – especially in less popular cuts of pork – but we cannot expect the sector to adjust overnight to the loss of half our existing market.


And we must consider the sustainability of the Chinese market, which so many countries are competing for.


There are huge numbers of poultry sheds being constructed due to an expected shift in protein consumption towards chicken, and we have to question how long will it take China to eliminate ASF from their herd.


While we have different stories to tell of the risks of no deal, all livestock sectors must continue to deliver a common message in what will be likely be a tumultuous few months.


Ed can be found tweeting at @edbarkerpig

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