Dividing up existing EU WTO TRQ market access commitments a between the EU27 and UK, could prove controversial as third country exporters seek to retain their access to the EU market, while seeking increased access to the UK market. Failure to reach agreement on the divisions of EU WTO TRQs could generate resentment amongst WTO members, with this leading to challenges to any transitional arrangements for ensuring ACP countries retain preferential access to the UK market which are not fully WTO compatible.
According to press reports, Beef & Lamb New Zealand and the New Zealand Meat Industry Association have expressed concern over the direction of discussions between the EU27 and the UK over the division of the EU’s WTO tariff rate quota for Lamb. ‘The EU currently takes about half of New Zealand’s total global sheepmeat exports’, with all of these exports taking place duty free. Without such duty free access no exports to the EU would be possible, given the 50% EU duty levied on lamb imports.
The chair of Beef & Lamb New Zealand, James Parsons, has argued current proposals for the division of existing EU28 quotas between the EU27 and the UK would ‘erode’ New Zealand’s access. Mr. Parsons argued New Zealand exporters ‘cannot contemplate a situation where the quality or quantity of New Zealand’s existing WTO market access rights with the European Union or the United Kingdom are eroded’.
He maintained the key to finding a solution lies in ‘full and proper consultations with New Zealand and all those other WTO members with an interest in the tariff rate quotas’. He declared ‘we trust the UK and the EU will work with their trading partners in an open-minded and constructive fashion to find a solution that works to fully honour their legal obligations regarding their existing market access commitments to third countries’.
The emerging EU27/UK deal on the division of EU28 WTO TRQ obligations reportedly applies not only to lamb imports but all WTO TRQs for all products. The emerging EU27/UK framework for the division of WTO TRQs is thus leading to ‘complaints from the US, Brazil, Argentina, Canada, Uruguay’.
|Comment and Analysis
The concern expressed by Beef & Lamb New Zealand and the New Zealand Meat Industry Association over the division of EU28 WTO tariff rate quotas is indicative of the discontent this could give rise to amongst WTO members. This discontent could serve to undermine the goodwill amongst WTO members necessary to ensure tolerance for any arrangements which preserve ACP access to the UK market during any transitional period, until such time as new bilateral trade deals between the UK and ACP countries are in place. This could lead to challenges in the WTO to any arrangements which are not technically WTO compliant.
Since the conclusion of technically WTO compliant arrangements during the uncertain transition period will be extremely difficult to achieve, the lower threshold of ensuring WTO tolerance for the transitional arrangements would appear essential. It is this tolerance which a political mishandling of the division of existing EU28 WTO TRQ commitments could jeopardise.
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Globalmeatnews.com, ‘New Zealand meat industry concern over Brexit quota rumours’, 9 October 2017