As the EU secures a new trade deal with Mexico, Chris Horseman asks where UK producers stand as Brexit day approaches.
The new EU trade agreement with Mexico, concluded on April 21, could be great news for UK farmers – if Britain gets to benefit from the new deal’s provisions.
The Mexicans have offered EU exporters new tariff rate quotas of up to 50,000 tonnes for skimmed milk powder (SMP), as well as scrapping tariffs on agricultural products ranging from blue cheese to pork.
This holds out the promise of significantly increased sales to the world’s tenth most populous country, with firmer domestic prices as a result.
It is further good news to set alongside the EU’s soon-to-be-ratified trade agreements with Japan, another lucrative market for dairy and pork producers in particular, and with Singapore, a key trading hub for the South East Asian market.
But as Britain prepares to leave the EU, there is still no clarity as to whether, or how, UK farmers and traders might take advantage of these new openings.
The first priority for the UK is to retain access to the EU’s various trade agreements during the ‘implementation period’ which runs from Brexit day on March 29 next year, until the end of that period on December 31, 2020.
The EU is supportive, but it will rely on the goodwill of the trading partners concerned, who will, in effect, be asked to ‘pretend’ that Britain is still an EU member state during those 21 months.
On the assumption this is successfully navigated, the UK will then need to negotiate its own post-Brexit position toward those countries with whom the EU has existing trade deals.
Much of the focus until now has been on how to work out the UK’s share of EU import quotas, such as those for New Zealand lamb and butter.
But what should be the UK’s share of other countries’ concessions to the EU, including that 50,000t Mexican SMP quota, or Canada’s 16,000t quota for cheese?
A key issue will be whether the deals are actually ratified by the time the UK leaves the EU.
If they are not, then it will be down to the UK government to re-capture these market benefits when it launches its quest for new post-Brexit trade deals worldwide.
But, even if the deals do come into effect while the UK is still a member, tricky negotiations will still lie ahead – with both the EU and the trading partner concerned – to make sure Britain’s producers and manufacturers capture their fair share.