The sheep sector is enjoying better prices right now; boosting producer returns but negatively affecting consumer sales. With lamb exports so critical to the sector’s future industry find a better to co-ordinate lamb production with consumer demand once the long-term trading arrangements between the UK and EU are agreed? The UK government thinks that clarity will be available by the end of 2020. Don’t bet on it.
The UK government has made much noise about the significance of 11pm, Friday 31st January 2020. Yet we will notice almost no impact in our trading situation when we wake up the following morning. A German retailer calling a Scottish lamb processor in early February to buy a shipment of sheep-meat for Easter will not have to take tariffs, quotas or regulatory differences into account. The paperwork will be minimal. In the jargon, trade will be “frictionless”.
The promising news is that the UK and EU could well agree a Free Trade Agreement by the end of the year. But given the incredibly short negotiation time available, it will be very basic and probably cover only minimising (hopefully to zero) tariffs on goods. The EU will benefit most as it sells far more goods to the UK (e.g. beef, cars). So, hopefully, access to the critically important EU sheep-meat market will not be subject to very high EU import tariffs that would make exporting UK sheep-meat to the EU uneconomic.
The bad news is that exporting could still be badly hit by paperwork and inspections, which can be broadly grouped together, and called non-tariff measures (NTMs). For those of you with good memories, remember how the French used to play games to limit UK lamb exports back in the 1980’s before the single market (with its common rules and regulations) was introduced.
Kev Bevan for the Farm Advisory Service
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