BREXIT Proven Tougher For EU Meat Traders, Chance For Third World Nations in Meat Export
The European Livestock and Meat Trade Association (UECBV) published a report assessing the impact on the EU meat sector in the event ‘a hard BREXIT’. This led to many complications like job losses in EU meat industry. US FDA finds it a possibility for an opportunity to bring third countries in exports which was earlier not allowed in UECBV laws.
The European Livestock and Meat Trade Association (UECBV) published a report titled “CRISIS: The EU Meat Industry in a Hard BREXIT Scenario”. It discusses about the impact on the European Union (EU) of the United Kingdom (UK) decision to leave its single market (BREXIT). The report, compiled by the Red Flag consultancy, investigates what it would mean to both UK and remaining EU meat sectors if the UK drops out of the Single Market and the Customs Union with neither a trade deal nor a transition arrangement in place when BREXIT kicks in on 29th March 2019. This so-called ‘no deal’ situation is viewed by UECBV as the worst case scenario of a hard BREXIT in which the EU-UK trade relationship would fall back on WTO rules.
According to UECBV’s analysis, increased tariffs combined with increased costs for customs and veterinary checks and transport would reduce EU exports of meat to the UK by up to 84 per cent for beef, 48 per cent for pork and 76 per cent for sheep meat. UECBV estimates that the resulting surplus supply on the EU market would result in a structural reduction in EU beef prices of over 8 percent and pork prices by over seven per cent. This would reduce the value of EU production of beef by approximately 2.4 billion Euros and of pork by over 2.3 billion Euros. The relocation of this surplus meat would also impact international meat markets as it would increase export competition. UECBV concludes that the impact on the EU meat sector of such a hard BREXIT would be significantly greater than the Russian import ban in 2014, leading to the potential loss in the EU meat industry of 32,000 jobs.
“In reality, the trade and price effects would be offset by an increase in trade with third countries, a possibility which is not allowed for in UECBV’s model” as noted in the report. This may be a fine chance for nations like India that are creating new benchmarks in meat exports (India is world’s biggest water buffalo meat exporter in the world).
Glimpse of impact on member states & UK
Ireland and Denmark would take the hardest blows as their respective meat exports to the UK amount to 56 and 25 per cent of their total meat exports, followed by The Netherlands (13 per cent), Poland (12 per cent) and Italy (10 per cent). The impact on different MS not only depends on the volume of trade, but also on the type of meat.
UK is the third largest EU beef producer, the second largest poultry producer and the largest sheep meat producer, it is a net importer of meat from the EU except for sheep meat, for which it is a net exporter. The UK is thus an important export destination for EU meat, especially as it is a premium market with UK prices on average 10 per cent higher for beef and sheep meat than in the EU and even 20 per cent for pork. UECBV concludes that tariffs applied at WTO most-favoured nation (MFN) levels on meat trade between the UK and the EU would considerably increase meat prices for UK customers. For beef, prices could increase by between 36 per cent for quality cuts up to 100 per cent for manufacturing beef. UECBV estimates that meat exports from the UK to the EU would decrease by 90 per cent for beef, 56 per cent for pork and 53 per cent for sheep meat. This is a clear sign of opportunity for South & South East Asia.
