The new Free Trade Agreement (FTA) between New Zealand and the UK will offer a substantial boost for Southland farmers and exporters of beef and lamb, says Jeff Grant, representative for the New Zealand meat industry during FTA negotiations.

Under the FTA, quotas and tariffs on beef and lamb exports will be phased out over 15 years, with the amount of tariff-free exports growing annually. 

Grant says the agreement will provide an instant advantage. 

“The initial benefit for the NZ meat industry [from the reduction of tariffs] is $40 million for year one. The quota on beef has been so low, it wasn’t effective for the industry, so this is a big jump. The benefits will only grow as we progress over the reduction of tariffs.” 

Grant says the staggered approach will work best for the New Zealand meat industry. 

“15 years sounds like a long time, but when you’re starting from a nearly zero base, this accurately reflects the growth that might happen.” 

“For the meat industry, we took the view that a big gain over a long time was better than a small gain over a short period. It’s not about dumping a whole lot of beef into the UK market; it’s about taking the time to build that market.” 

The quota for New Zealand beef will increase in annual instalments, from a starting point of 12,000 tonnes until it reaches 60,000 metric tonnes in year 15, after which it will be duty and tariff-free. 

The transitional quota for sheep meat will reach 50,000 metric tonnes per year, from year five to 15, in addition to the existing access of over 100,000 tonnes through its World Trade Organisation Quota.  

Both countries have also agreed to provisions covering sanitary measures and customs procedures, which include enabling the release of frozen goods within 48 hours of arrival. 

For perishable goods such as chilled meat, the FTA sets out a six-hour release timeframe. 

Grant says this will provide exporters with the assurance that their products will reach customers quickly. 

“It’s recognising the fact that that New Zealand, with MPI (Ministry of Primary Industries), has very high sanitary standards, probably the top one or two in the world. This will provide farmers with the benefit of knowing that their product will be moved, and not held up at port with bureaucracy.” 

He says the next step for the industry will be looking to enter into an FTA with the European Union. 

“What will be critical over the next 12 months is that we have success with the European side. It will give increased flexibility to the whole industry.” 

New Zealand has not had tariff-free access into the UK since Britain joined the European Economic Community (EEC) in 1973.

The FTA has been signed, but still needs to be ratified by both countries before it can come into force.