The UK government has heralded its new deal with one of the world’s major trading blocs, but the egg industry in particular is not impressed. Michael Barker reports
The UK has signed up to its biggest post-Brexit trade deal to date, with the government trumpeting the economic boost, job creation and export potential it could bring.
The eclectic mix of countries that makes up the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – ranging from Australia and Japan in Asia to Mexico and Peru in the Americas – will soon include the UK and be worth a sizeable 15% of global GDP. Describing the UK as “at our heart an open and free-trading nation”, Prime Minister Rishi Sunak pointed out that the UK is the first European country to join the bloc, putting it “at the centre of a dynamic and growing group of Pacific economies.”
Among the benefits of joining, the government cited a slashing of red tape – which will particularly boost the UK’s services industry – and the fact that UK exporters will become more competitive in those markets. It is also expected that investment between the UK and CPTPP countries will increase substantially, boosting the economy on both sides.
The deal has been broadly welcomed by the NFU from an overall farming perspective, with president Minette Batters saying it could provide good opportunity to get more British food on overseas plates. Contrasting it with the individual deals struck with Australia and New Zealand, Batters points out that the government has negotiated a “far more considered and balanced” outcome with the CPTPP with respect to managing market access for Britain’s most vulnerable sectors.
The reaction from the poultry sector has, however, been more mixed. A spokesperson for the British Poultry Council notes that with the tariff rate quota on chicken imports rising to 10,000 tonnes over the next 10 years, poultry meat is currently a small part of CPTPP. “British poultry meat exporters do see potential in deepening access to fast-growing economies within the CPTPP, but the detail is yet to be determined and we need SPS (sanitary and phytosanitary) agreements that safeguard our standards and values if we are to have meaningful trade interests in that region,” the spokesperson adds.
“What we know right now of the CPTPP is a stark reminder of what we have already lost with the EU since 2020. The cost and logistics of trading with countries so far away cannot compensate for the millions of pounds lost with our largest and most important trading partner.”
While there might be some positivity from the poultry meat industry, the deal has not gone down well within the egg sector. The British Egg Industry Council (BEIC) says it is “disappointed” that the UK government has not excluded eggs as a sensitive product, noting that it provided extensive economic evidence to both officials and ministers. “This economic evidence alone should have acted as a strong rationale for retaining import tariffs on eggs and egg products,” says chief executive Mark Williams. “It is also disappointing given this government’s emphasis on animal welfare and farming standards, that they have opened the door to products that not only would be illegal in the UK, but also in the EU.”
Both the BEIC and British Free Range Egg Producers’ Association (BFREPA) have united in their position that the UK could see an influx of eggs from Mexico in particular, undermining UK standards and destabilising the market. “The government has been incredibly naive in thinking that just because Mexico does not currently export egg products to the UK that they are not the threat, but this may not be the case in the future,” Williams says. “The UK’s chief negotiator stated that the UK would seek to look to the UK bilateral trade deal with Mexico to enhance animal welfare standards and encourage a wider takeup of standards. We can only be sceptical of the chances for progress as Mexico is a 99 per cent conventional cage industry.”
Echoing those sentiments, BFREPA chief executive Robert Gooch stressed that the CPTPP deal phases out all duties or tariffs on egg imports over 10 years. “As a net importer of eggs and egg products, this provides huge opportunities for cheap egg exporters – like Mexico – who produce eggs to standards that our illegal in the UK,” he says. “While these countries don’t export much to us at the moment because they were not able to historically under EU tariffs/duties, they are likely to do so in the future. “The worst thing about this is that throughout Brexit successive government administrations said they would ensure that all imports would have to comply with our animal welfare standards, but there is nothing in this deal to stop battery cage-produced eggs from coming in without limit in ten years’ time.”
For now, it seems little is likely to immediately change once the deal is fully signed off, but the warning from the egg industry is clear that there remains a substantial threat if certain standards are not upheld.
What is the CPTPP?
The CPTPP is a huge trading bloc in the Indo-Pacific, made up of 11 countries. It will have a combined population of 500 million people once the UK joins.
What countries are involved?
The UK is joining Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Are any of these new markets?
Joining the bloc means the UK will have a Free Trade Agreement with Malaysia for the first time, giving access to an economy worth £271 billion in GDP in 2021.
How much does the UK export to the CPTPP?
Total UK exports to CPTPP countries were worth £60.5 billion in the 12 months to the end of September 2022, and the government expects this to grow. As well as benefiting the services industry in particular, the government says there are agricultural opportunities, such as lower tariffs on exports of cheese and butter to Canada, Chile, Japan and Mexico.
Playing the long game
Supply chain expert Oliver Chapman of OCI says that there is potential long-term gain for the UK in joining CPTPP – but believes the UK’s physical distance from the Pacific reduces the benefits.
“At face value, news that the UK has agreed a deal to join CPTPP is good news for the UK and supportive of supply chains that include UK organisations,” he says. “When and if the UK finally joins the huge trading bloc, UK organisations can participate in tariff-free trade when trading directly with other bloc members. Since the total GDP of CPTPP is £11 trillion, the economic boost to supply chains and UK organisations will not be trivial.
“The benefits are tempered somewhat, however, when you consider that the UK already has trade deals with nine out of eleven of the members of CPTPP. But, then again, this is not quite as damning a point as it may seem since not all these agreements are full trade agreements. Maybe of greater significance is the possibility, or indeed probability, that CPTPP is likely to expand further still. Potential new members include fast-growing ASEAN countries Indonesia, Thailand and the Philippines, the world’s tenth-largest economy South Korea, Taiwan, several South American countries and possibly even China.
“So, while the UK’s membership of CPTPP may not introduce significant benefits at the outset, they are likely to improve significantly over time.”