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Government publishes ‘no-deal’ import tariff schedule: What farmers need to know

Sheepmeat will be protected under the plans but cereals, potatoes and most fresh produce imports would face no-tariff barriers.

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Government publishes ‘No deal’ import tariff schedule: What farmers need to know

As the political furore around the Prime Minister’s Brexit deal continued to swirl this week there was at least some certainty on tariffs for agricultural products in the event of no deal.

 

AHDB chief strategy officer Tom Hind said the proposals took into account sensitive agricultural products such as meat and some dairy but cereals, potatoes and most fresh produce imports would face no-tariff barriers.

 

He highlighted many EU imports would face tariffs for the first time and UK exports would still face the EU market’s common external tariff, with sheepmeat particularly affected.

 

“Trade implications remain substantial. Businesses will be considering variables such as currency, non-tariff barriers, the perishable nature of many foodstuffs and the proliferation of just-in-time supply chains," he said.


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Tariff implications for UK imports

  • Sheepmeat - 57% of the product value
  • Beef imports- tariff level for fresh of chilled boneless beef would fall from 12.8% + €303.4/100kg to 6.8% + €160.1/100kg.
  • Pig meat products – reduced to about 13% of the current rate the EU applies to countries outside the bloc. The tariffs are applied on a per kg basis, but are higher for more valuable goods.
  • Butter - tariffs are €60.5/100kg. For the cheeses with tariffs, the rates range between €18-29/100kg.
  • Fertiliser - UK tariff of 6.5%

NFU President Minette Batters said they were relieved to finally be able to see the tariffs but it was ‘appalling’ it was had been left so late leaving farmers and businesses with no time to prepare.

 

She said they were pleased to see the Government had elected to treat many agricultural sectors sensitively it was worrying some sectors did not have this protection.

 

“Even those sectors that are treated sensitively will, in most instances, see worrying and large reductions in the tariff rates currently charged on non-EU imports.

 

“Furthermore, the approach taken by the government to lump products under the same high-level tariff code, for example whole carcases and high value cuts of fresh beef, means there is a high chance of market distortion for many sectors who are deemed to have been treated sensitively.”

 

Ms Batters said while they recognised the importance of ensuring food prices did not rise for consumers, they were deeply concerned the approach could lead to a greater reliance on imports.

 

She urged no deal to be taken off the table and MPs and government to find a workable solution.

 

Scotland

 

NFU Scotland president Andrew McCornick said it undermined food security and also urged politicians to take no-deal off the table.

 

“It is wholly unacceptable that, in the event of a catastrophic no deal Brexit, the Government intends to treat EU and non-EU products being imported to the UK differently to the way that they will treat our own produce.

 

“Why should our exporters face tariffs when the UK Government is planning to let a lot of produce in tariff free?

 

“Exports and Imports should be treated in the same way and all agricultural products whether meat, dairy, cereals, fruit, vegetables and eggs should be treated in the same manner by the UK Government and given the same level of protection.”

 

Wales

 

NFU Cymru President John Davies said while it provided some protection for sheep businesses, a no deal scenario would still result in tariffs on Welsh exports.

 

“The sheep sector is heavily reliant on access to the EU market therefore this remains a major concern.”

 

He added the prosperity of the industry was dependent on the ability to export its produce.

 

“High tariffs on our exports will severely hinder, or possibly completely stop, our ability to continue to do that.”

 

He added other sectors had not been afforded the same protections which would concern producers in the beef and dairy sectors as tariffs were reduced.

 

“Welsh egg, cereal and vegetable sectors, meanwhile, will not be able to take any comfort whatsoever from the indication that imports coming into their markets will not attract any tariffs at all.”

Disaster for Northern Ireland

Ulster Farmers’ Union (UFU) said plans for a no-deal Brexit would devastate Northern Ireland’s farming industry.

 

UFU president, Ivor Ferguson, said it was further proof a no deal would have catastrophic consequences. the plans

 

“We have very real concerns about the proposal for a zero per cent tariff on agricultural goods coming from the Republic of Ireland (ROI) into Northern Ireland and the differential treatment with ROI and GB trade where tariffs will apply.

 

“This would drive down prices and hit producers here. It could also potentially open the door to illegal trade which would seriously impact on the integrity of the NI agri-food industry.

 

“It is unlikely the EU would offer the same zero tariff to Northern Ireland or the UK as a whole. This is why we have called for reciprocal tariffs.

 

“Whatever the EU applies, the UK should apply in return. The tariff plans emphasise why a no deal Brexit must be avoided.”

 

He added it further underlined why no deal must be avoided.

 

“This would be the worst possible outcome for family farm businesses in Northern Ireland. The UFU supported the Prime Minister’s Withdrawal Agreement, while not perfect; it would have got us over the line to avoid a no deal.

 

“Politicians must sort out their differences and come up with solutions to deliver on their Brexit promises to protect the economy. They must ensure we end up with a workable solution that allows for an orderly exit from the European Union.

 

“Walking off an economic cliff cannot be the answer.”

Cereals

Mr Hind said in simple terms the UK grain and oilseed rape market would be open to all global exporters.

 

"Domestic importers would face no extra costs to import from any origin worldwide for wheat, barley, maize and oilseeds," he said.

 

As part of the EU, UK growers are partially protected from global markets by the tariff rate quota (TRQ) system, which allows a specified volume of grain into the EU at a preferential tariff.

 

"The risk for growers is that alternative, cheaper, grain imports would be freely available to import into the UK.

 

"Therefore in a no-deal scenario, the domestic price of grains specifically could move lower in order to compete against cheaper imports to find demand."

 

For the potato sector the move would also in theory open up the UK, however, the UK has previously imported the majority of its potato requirements from the EU at zero-tariff rate.

 

"As such, in a no-deal scenario, the impact upon the potato sector would be lessened due to the continuation of existing trading relationships with zero tariffs and favourable logistics from near-continent suppliers.

 

"More specifically, for imports of new potatoes from Israel, currently we import under an EU-wide preferential agreement that sets tariffs at zero. This trade will not be harmed by the move to zero-tariffs in a No-Deal situation."

Sheep meat

Mr Hind said the tariffs detailed no change from the EU most favoured nation tariffs, meaning he volume currently imported from the EU could now face a tariff of over 40 per cent on average.

 

“Most of the remaining UK imports of sheep meat will continue to be imported tariff-free under quotas from New Zealand and Australia.”

 

But UK exports will face the same tariff as any other country without preferential access to the EU.

 

National Sheep Association chief executive Phil Stocker said he was pleased to see the Government recognising the importance and sensitivity of the sector.

 

“Our understanding is that it would mean any new country importing sheepmeat into the UK, or any volumes exceeding existing quotas with preferred nation agreements would have to do so at the stated tariffs – effectively WTO tariff rates.”

 

However, NSA was still concerned no deal would mean far higher volumes of lamb onto the domestic market than historically catered for and the tariffs would not apply to existing quotas from countries such as New Zealand and Australia, although they would not be able to increase their UK exports.

 

He said this meant a no deal could mean the markets become flooded, with no change in imports and the export markets subject to high tariffs, driving the price of lamb down.

 

NSA has been warning about the risks of free trade deals with countries like New Zealand and Australia.

 

“In a roundabout way, if British producers are able to hold on tight and brace for a few months as lamb prices deflate, eventually importers will switch their supply towards other markets and may reduce the amount they import into the UK.

 

“At this point, it would likely lead to the UK focusing on our domestic market.

 

“However, to do this well we still need longer term plans and assurances and we are still lacking a coherent food strategy for the UK that would give confidence for the industry to adapt and invest in order to even out the supply of British product throughout the year.”

Pork

Mr Hind said tariffs on most pig meat products would remain in place, but will be reduced to around 13 per cent of the current rate the EU applies to countries outside the bloc.

 

"UK pig meat imports are currently sourced almost entirely from the EU, and these shipments account for around 60 per cent of domestic consumption.

 

"In a no-deal scenario, these imports would face tariffs for the first time."

 

He said the tariffs would equate to around 4-5 per cent of the price of pork, bacon and ham imports.

 

National Pig Association senior policy advisor Ed Barker said: "We welcome the fact we have some kind of protections on imports in the event of a no deal, especially on the high value cuts such as loin and leg.

 

"In this scenario, pork could be coming in from anywhere in the world, so some protection to prevent the market being flooded and undermining domestic production is essential.

 

"While far from perfect, this represents something of a win for NPA. At one stage it looked like there would not be any protection all all, but we made a strong argumemt about why some tariffs must be retained.

 

"The outcome is much more favourable than appeared likely a few weeks ago."

Dairy

Tariffs have been announced for butter and a selection of cheeses including processed cheese, cheddar and blue-veined cheeses.

 

Mr Hind said: "The butter tariffs are €60.5/100kg for butters and €73.8/100kg for butteroil; for butter this is about one third of the current MFN tariff.

 

"For the cheeses with tariffs, the rates range between €18-29/100kg, and are generally 13 per cent of the current MFN tariff. There are also tariffs that currently exist on dairyproducts such as milk, cream, powders and yogurts will be dropped to zero."

 

In 2018, 99.8 per cent of UK dairy import volumes came from the EU and were therefore tariff-free.

 

Under a no-deal scenario, approximately 18 per cent of total dairy imports would be subject to a tariff, with a major effect on the Republic of Ireland.

Beef

Tariffs would be applied to beef imports, albeit at a lower level than current EU tariffs, according to Mr Hind.

 

In 2018, the UK imported 380,000 tonnes of beef, either fresh, frozen or processed, 340,000t was imported tariff-free from the EU.

 

“However, a TRQ of approximately 230,000 tonnes would be implemented.

 

“This allows tariff-free access to the UK, and can be used by any country, including EU members. This is in addition to 55,000 tonnes of pre-existing EU TRQs that the UK has agreed to take as its share after Brexit, at a 20 per cent tariff.

 

“This leaves approximately 95,000 tonnes of beef imports that will be subject to the new UK tariffs.”

Copy of Tariff implications for UK imports

  • Sheepmeat - 57% of the product value
  • Beef imports- tariff level for fresh of chilled boneless beef would fall from 12.8% + €303.4/100kg to 6.8% + €160.1/100kg.
  • Pig meat products – reduced to about 13% of the current rate the EU applies to countries outside the bloc. The tariffs are applied on a per kg basis, but are higher for more valuable goods.
  • Butter - tariffs are €60.5/100kg. For the cheeses with tariffs, the rates range between €18-29/100kg.
  • Fertiliser - UK tariff of 6.5%

Copy of Tariff implications for UK imports

  • Sheepmeat - 57% of the product value
  • Beef imports- tariff level for fresh of chilled boneless beef would fall from 12.8% + €303.4/100kg to 6.8% + €160.1/100kg.
  • Pig meat products – reduced to about 13% of the current rate the EU applies to countries outside the bloc. The tariffs are applied on a per kg basis, but are higher for more valuable goods.
  • Butter - tariffs are €60.5/100kg. For the cheeses with tariffs, the rates range between €18-29/100kg.
  • Fertiliser - UK tariff of 6.5%
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