UK farmers are set to face greater market competition from Australia and New Zealand after EU trade ministers gave the green light to commence negotiations on free trade agreements with the two countries this week.
Australia and New Zealand have both said they want improved access to Europe’s agricultural markets as part of any deal, though the EU has made clear quotas and tariffs will continue to protect the most sensitive farm products.
Although the UK is likely to have left the EU by the time the new deals are completed, which is expected to be several years from now, recent speculation about a possible indefinite extension of Britain’s customs arrangements beyond 2020 leaves open the possibility that the new terms of trade for Australia and New Zealand may yet apply to the UK when they come into force.
“We look forward to adding Australia and New Zealand to the EU’s ever-growing circle of close trading partners,” commented EU Trade Commissioner Cecilia Malmstrom, who will lead the EU team in negotiations which are expected to get under way next month.
Australia will be looking for significant increases in quotas, or reductions in tariffs, on its exports of beef, cereals and sugar in particular, while New Zealand has its sights on improved market access for beef, sheepmeat and apples.
On the other hand, Australia is already a net importer of agri-food products from the EU, and the deal offers the prospect of increased exports of European dairy and processed food products.
The timetable for the trade negotiations is complicated by Brexit, with the UK government having signalled its intention to pursue trade deals with both Australia and New Zealand as a high priority once it leaves the EU.
Both sides are insisting the newly-triggered EU trade talks will be dealt with entirely separately from any post-Brexit trade negotiations with the UK, and also from the tricky question of how to divide up the EU’s existing tariff rate quotas (TRQs) between the UK and the EU27.
In reality, however, the three negotiating ‘strands’ are highly likely to converge as the political contours of Brexit become more clearly defined.