New Zealand trade deal: Government swerves agri-food concerns in response to Committee report

The International Trade Committee today publishes the Government’s response to its report on the UK’s trade agreement with New Zealand.

In its report, the Committee called for an analysis of potential risks arising to the UK’s food security, raising concerns over the elimination of tariffs on New Zealand goods and the impact of opening UK agri-food markets to cheaper imports. Much of New Zealand’s beef, sheep-meat and dairy are cheaper than UK equivalents, due to lower production costs.

The cross-party Committee of MPs questioned whether the pros and cons of tariff liberalisation had been fully considered, pointing to the Government’s own impact assessment, which predicted that the UK’s agriculture, forestry, fishing, and semi-processed food sectors could all contract due to increased competition.

The report also found few new opportunities for UK exporters resulting from the deal. While concluding that, on balance, the agreement should be ratified, the Committee suggested more export opportunities and greater safeguards for producers could have been negotiated. The Committee also called for a debate and a vote in Parliament on the agreement.

In its response, the Government swerves the Committee’s recommendation to publish an overarching trade strategy. It also reaffirms its belief that the UK will not experience a significant influx of agri-food imports from New Zealand in the near future. While the Government agreed that Parliament should have an opportunity to debate similar agreements in the future, it disagreed with the Committee’s view that MPs should also be able to vote on them.

Commenting on the Government’s response, Angus Brendan MacNeil MP, Chair of the International Trade Committee, said:

“Our report reflected the well-founded fears of producers that throwing open the UK’s agri-food markets to cheaper products could see them overwhelmed, undermining food security.

“The Government leaves agricultural producers exposed to risk, some might go as far as to characterise this as playing fast and loose with agricultural in the UK. Certainly, pig farmers this week were reported as saying that the Government, ‘doesn't care’. The Government has done little to show otherwise.

“The Government’s confidence that this will not be an unintended consequence of the New Zealand deal appears rooted in the belief that global affairs will continue as they have done in previous years. Time will tell, and for the sake of these already hard-pressed businesses and farmers, we hope the Government’s analysis is proved correct, especially given ongoing geopolitical instability.”

The report included the following conclusions and recommendations:

Agriculture and food

• The Government appears to have made significant concessions in terms of tariff liberalisation on agri-food products which, as it acknowledges in its impact assessment, are likely to create an economic contraction for some sectors. We echo agri-food producers' concerns about opening the UK market to cheaper imports without either more export opportunities or sufficient safeguards. The Government must explain why it has chosen to liberalise tariffs on agri-food so quickly, as the agreement appears to offer few new opportunities for UK producers (Paragraph 88).
• We recognise that New Zealand agri-food imports, which may be cheaper than UK produce, may benefit consumers, particularly during the cost of living crisis, and that the relatively low carbon intensity of New Zealand's production methods may be beneficial to the environment. However, we are concerned that the Government has not adequately considered the longer-term food security risks that the agreement may present (Paragraph 94).
• The Government should publish an analysis of the risks to the UK’s food security arising from the agreement and how these can be mitigated. It should also include an analysis of any additional risks to UK food security, explaining how these are balanced against other considerations, such as cost and the environment, in future impact assessments (Paragraph 95).

Northern Ireland

• It is shocking that the Government has signed trade agreements without a thorough understanding of the impact they will have on Northern Ireland because of the Protocol. We welcome the willingness to look again at this issue that the former Secretary of State showed, and note that the Government has said it will develop a workplan in order to do so. In light of this, we ask the Government to tell us what the workplan involves and whether it will be in place in time to inform the impact assessments for the trade agreements the Government is currently negotiating (Paragraph 52).

Trade strategy

• We remain concerned about the absence of a single, clear trade strategy. Without a trade strategy there is no marker against which we, stakeholders or the public can assess how far trade agreements, individually and collectively, help to deliver the UK's strategic requirements. We are also concerned that the Government's approach to negotiating new agreements is reactive and hasty, and that it is not joined-up across each department. We ask the Government to reconsider its approach and publish a trade strategy which clearly sets out its vision for trade and explains how the Government will achieve it (Paragraph 23).

Further information:

• The Committee launched its inquiry into the UK-New Zealand free trade agreement in March 2022. Oral evidence session transcripts and replays, written evidence submissions and correspondence relating to the inquiry can be found here.
• The Committee’s report was published in October 2022. The report can be accessed here.