Tuesday, 19 February 2019 09:55

Challenges ahead for primary exporters

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Britain will leave the EU on March 29, presenting challenges for New Zealand's primary industries. Britain will leave the EU on March 29, presenting challenges for New Zealand's primary industries.

MPI is focussed on the worst-case scenario of a no deal Brexit.

Read: Prepare for a ‘no-deal’ Brexit.

It is looking at regulatory issues and making sure stakeholders have up to date information, says Rochelle Ferguson, MPI specialist adviser, market access.

Brexit presents particular challenges for primary industries because of product perishability, seasonality and tariff quotas, and sanitary and phytosanitary regulations, says Ferguson.

The veterinary agreement with the UK is significant and other countries are lined up to get the same, Ferguson says. It agrees that the measures we check are equivalent to those of the EU which provides for robust trade between the two countries, she says.

MPI has also had a letter from the chief veterinary officer to all UK trading partners saying they will recognise EU model health certificates and establishment listings from the EU for at least the first six months in the event of no deal. MPI also aims to replicate the arrangement it has with the EU in organics and fisheries certification, aiming to have this in place by March 29.

MPI policy analyst Zoe Tame says where they cannot mitigate the risk they are doing their best to communicate this to exporters, particularly small ones.

Michelle Slade from the Ministry of Foreign Affairs and Trade (Mfat) says they have been doing everything they can through the WTO and unilaterally to protect NZ access into the EU and the UK.

One area of concern is a proposal by the UK and EU to divide up the WTO tariff rate quotas which are important for a number of NZ’s agricultural exports into the EU and UK because of the high tariffs in the out-of-quota environment.

“It removes the flexibility currently in place to send up to the full volume of the quota into the EU or UK according to fluctuations in demand. So we have a serious concern about this.

“[Mfat has] had assurances from the UK particularly that they are looking to ensure third parties [will not be] not worse off through this process. We are working to ensure they follow through on that.”

Equally Mfat is working hard through the Geneva and WTO processes to seek to protect that access. They are seeking to strengthen trade and economic relationships. 

“Both New Zealand and the UK have indicated publicly that we intend to work to negotiate a high quality comprehensive bilateral FTA,” Slade said. 

Mfat now has an FTA in process with the EU and wants to do the same with the UK when the British are free to begin this. UK has nominated Australia, New Zealand and the US as priority FTA partners after Brexit and has expressed interest in the 11 country partnership in the CPTPP trade agreement.

NZ Customs group manager revenue and assurance Richard Bargh says NZ would like a trust trade relationship with the UK and the EU, but that will have to wait until the UK quits the EU.

“Then we will be in the queue as much as any other country. But we will be pressing the UK to put NZ first on that list.”


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