Trade partners attack EU plan for post-Brexit import quotas

photo : ft


A group of countries including the US, Brazil and China has objected to EU plans for splitting up sensitive import quotas with Britain after Brexit, in the latest sign of how big trading powers are stepping up their demands about how the UK’s departure should be handled.

Trade officials said that more than 20 countries had objected to proposals put forward by Brussels and London over how to split up the tariff-rate quotas, which define the volume of sensitive goods such as meat and cheeses that other World Trade Organization members can export to Europe.

The concerns were raised at a meeting on Monday at the WTO in Geneva, with several countries warning the plans would be unfair on their companies and farmers.

The EU and the UK have worked closely on the proposals on how to share out the tariff-rate quotas, which are hugely valuable to countries such as Argentina and New Zealand, which depend heavily on agricultural exports, as well as to the powerful farm lobby in the US.

The issue is highly important for Brussels and London, since the talks will affect how much competition UK and EU farmers face. Failure to find a solution at the WTO could also lead to legal challenges.

The dispute is one of several disagreements snarling up the UK’s efforts to detach itself from the EU at the WTO, with negotiations also proceeding slowly on the general market access the UK will give other WTO members, and on the UK’s membership of an international pact on public procurement.

The tariff-rate quotas set the amounts of goods that can be imported at low or zero tariffs, rather than at full WTO rates that can exceed 100 per cent.

London and Brussels came up with a joint plan last year that involved splitting up current EU quotas based on consumption patterns, meaning that the UK would take a larger quota for products such as New Zealand lamb, where it traditionally accounts for much of the EU demand.

The UK and EU are seeking WTO endorsement of the proposal before Brexit takes place in March.

But countries at Monday’s meeting complained they would still lose out, as the split quotas would reduce flexibility for exporters used to exporting to a single 28-nation market.

One official said Australia warned at the meeting that some split TRQs risked being “too small to be commercially viable”, while the US underlined that it could not accept a result that left its exporters worse off.

A group of 12 countries, including the US, China, Brazil and Mexico, circulated a draft note ahead of the meeting stressing the drawbacks of the EU plan, while others also raised criticisms at the meeting.

Brussels fears that the complaints are a disguised way of countries trying to win greater market access rights than they have enjoyed up to now, with negotiators using Brexit as an opportunity to exert pressure on the EU.

Asked on Friday about the Brexit difficulties at the WTO, Cecilia Malmstrom, the EU’s trade commissioner, said a Brexit deal between the EU and UK, with the transition period that comes with it, would give more time “to solve these issues”.

“I hope that we will, in a good spirit, do that”, she said.

The EU is set to hold talks with specific countries next week in an effort to address the concerns.

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