New Zealand (NZ), along with Australia, are the dominant global exporters of sheep meat – accounting for almost 70% of product traded – and this is split almost equally between them. The UK is a distant third in terms of global sheep meat exports, and it is this trade that is of concern to Scottish farmers once the UK leaves the EU. At present exports to the EU account for 26% of sheepmeat sales, according to QMS.

The EU is a major market for NZ, with a tariff-free quota access of 228,000 tonnes that can be sold anywhere in the 28 member countries of the EU.

In practice, a large volume of this is taken up by the UK, who took approximately 48,000 tonnes in the year to 31 August 2017 out of the 100,000 tonnes shipped to the EU. NZ sales to the EU are down approximately 20,000 compared with the previous year.

Most generous EU access

NZ has one of the most generous levels of quota access to the EU for any meat product, at 228,000 tonnes.

This is something of a legacy issue that dates back to a time before the UK was a member of the EU, when it was a major importer of NZ lamb.

On joining the then EEC in 1973, a quota access of 228,000 tonnes was agreed, no longer confined to the UK but to the entire EEC and later EU, as it grew from nine member states to the present 28 members.

Now that the UK is about to leave the EU, one of the many issues in the Brexit negotiation is how EU import quotas – such as the one for 228,000 tonne NZ lamb – should be shared out.

In one of the few areas of agreement between EU and UK negotiators, the position arrived at was that the quota should be shared on a pro-rata basis, based on how much of the imports went to the UK and how much to the EU 27 over a three-year period.

However, Ben O’Brien from Beef + Lamb NZ explained to the Farmers Journal Scotland that this isn’t the same as having the option to use the full quota anywhere in the EU 28, as opposed to splitting it.

Their view is that any split based on current sales is arbitrary and potentially restricts access to one market or the other. NZ, along with a number of other exporting countries to the EU, have written to the World Trade Organisation (WTO) which adjudicates on trade disputes between members.

Access does not mean sales

Ben O’Brien went on to explain that they want maximum opportunity to trade and that access doesn’t necessarily mean more sales.

NZ has several market options for lamb, and the conclusion of a free-trade deal with China a few years ago has really opened up that market.

In the year to the end of August, it accounted for approximately 80,000 tonnes of NZ sheepmeat exports, which is close to par with the EU market of approximately 100,000 tonnes for that period.

On the issue of the EU opening separate trade negotiations with NZ and Australia, Ben O’Brien has noted the level of protest that has been around increased Mercosur access for beef to the EU in the most recent round of discussions. NZ has considerable beef offensive interests in free-trade negotiations, currently having access to the EU for just 1,300 tonnes.

Ultimately, the NZ position – as explained by Ben O’Brien – is that NZ is a believer in maximum free-trade and acknowledged the winding back of BSE based restrictions has been slower than might be expected under a strictly risk-based system and expressed some sympathy for those countries, in Europe and elsewhere, that have been adversely affected.

[All figures taken from Beef + Lamb New Zealand’s website.]