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EU meat and sugar groups join overseas critics of post-Brexit quota proposal

European meat importers and sugar refiners have joined some of the EU’s closest trade partners in opposing the bloc’s plans for splitting quotas with the UK after Brexit.

Under a draft proposal unveiled in May, the EU would split existing EU tariff rate quotas (TRQs) between the UK and EU-27 based on trade flows in 2013-15.

In some cases, this approach would see 100% of the TRQ staying with the remaining EU member states, while for some other products more than half would switch to the UK after its departure from the bloc.

Countries such as Australia and New Zealand had already made clear their dissatisfaction with the approach and this was reflected in comments submitted during a two-month feedback period which ended last week.

Brazil, US, Uruguay, Paraguay and Canada also raised objections – with most arguing that they will lose out overall if there is no longer the flexibility to switch between supplying the UK or the EU-27.

Meat and dairy organisations from some of these countries weighed in with attacks on both the content and timing of the EU proposal.

The International Beef Alliance, an organization that represents beef cattle producers from the seven countries listed above, said maintaining the ability to trade into either continental Europe or the UK was important to market stability.

“Apportionment of quotas also compromises the quality and quantity of quotas, and in the case of smaller quotas, apportionment renders some almost economically unviable,” the group added.

Critics closer to home

Not all the criticism came from outside the EU however – as several industry European industry bodies also registered their disapproval.

Among these was the UK-based International Meat Trade Association (IMTA), which represents importers and exporters of beef, lamb, pork and poultrymeat.

The group said it disagrees with the methodology used to decide how TRQs will be split.

Whilst using a three-year reference period may be convenient, the IMTA says it does not always give an accurate reflection of trade flows given the presence of the single market.

“Once imported into a member state the product is free to travel within the single market thus post clearance movement of product is common, responding to changes in price differentials between member states for particular cuts of meat,” the group notes.

For its part, the Germany based EPEGA – an organisation representing European poultrymeat importers – said it favours the option of maintaining the poultrymeat quotas unchanged in the EU27 after the UK’s departure from the bloc. The UK would then have to renegotiate quotas with third countries.

“As regards the arrangements for the tariff quotas of poultry meat from third countries after withdrawal of the UK from the EU, EPEGA sees no need for action, to behave generously towards the United Kingdom. The United Kingdom leaves the European Union voluntarily and should be aware of the consequences of the withdrawal,” it states.

Sugar refiners favour status quo

Meanwhile, the European Sugar Refineries Association (ESRA) said EU cane refiners oppose the proposal because it would limit their choice regarding access to raw sugar imports.

Even if the calculation method proposed would see the majority of volumes allocated to EU refiners, the group says it would still reduce overall access at a time when they are struggling to source sufficient raw material.

With wide variations in volumes imported from different countries each year, ESRA says the use of reference years is ‘inherently flawed’, adding that potential WTO challenges from other trade partners would create an ‘unacceptable level of uncertainty in trade’.

Rather than splitting TRQs as proposed, ESRA says it favours maintaining the status quo, saying this offers the “best solution for both the EU-27 and the UK sugar markets’.

Support from Copa Cogeca

Some EU farming groups take a more positive view of the Commission’s proposal however – with support coming from umbrella farming organisation Copa Cogeca and the National Farmers Union (NFU) of England and Wales.

Copa Cogeca said it supports the proposed TRQ split, given the alternative of absorbing all current bound quotas into the EU27 would lead to ‘serious imbalances in the single market’.

At the same time, it stresses the need to avoid any new allocation of TRQs for sensitive products such as sheepmeat and sugar in the context of bilateral free trade negotiations – at least until the future trade relationship between the EU and the UK is established.

Given the current slow pace of negotiations, Copa Cogeca said it supports the idea of the EU proceeding unilaterally with apportionment of the TRQs – a position echoed by German farmers’ union, the DBV.

For its part, the NFU says its supports the Commission’s proposal on TRQs after Brexit, adding that basing these on 2013-15 trade flows is a ‘defendable position at the WTO’.

However, if it becomes apparent that the chosen reference period is unrepresentative of the current trade flows, the NFU says it reserves the right to ask the UK Government to consider a more recent reference period.

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