When the UK secured roll-over trade agreements with Canada and Mexico in 2020, there was a commitment to begin negotiations for a further free trade agreement in 2021. The UK government has now fired the starting gun on these negotiations by launching an eight-week call for input on trade with both these countries.
NFU chief EU exit and international trade adviser Gail Soutar said:
“Both Canada and Mexico represent important markets for UK agri-food goods, with yearly exports to each country totalling on average £320m and £170m, respectively. Both markets offer opportunities for UK farmers to export their high-quality produce, and Canada is already an important market for our dairy producers.
“However, Canada and Mexico are also among the 10 largest agricultural exporters in the world, sitting alongside the likes of Brazil, the USA and Australia.
"The government must therefore be particularly mindful of the cumulative impact negotiating free trade agreements with these global agricultural powerhouses will have on our farmers here in the UK. This is particularly relevant given reports that Australian exporters will be offered tariff-free, quota-free access to the UK market, putting severe pressure on domestic producers.”
Potential for export growth
Canada and Mexico both represent important markets for UK agri-food goods. In 2019 the UK exported £344m worth of agri-food goods to Canada. Similarly, between 2017 and 2020 an average of £350m worth of agri-food goods were exported from the UK to Mexico each year, although this was largely driven by exports of beverages and spirits (the second-largest export category from the UK to Mexico, worth £99.6 million).
There is room for further growth however, particularly for UK dairy products. The UK-Canadian Trade Continuity Agreement did not replicate the quotas for cheese entering the Canadian market under CETA. In 2019 the UK exported c1,800t of cheese to Canada worth £14.1m. It was primarily high-value premium or specialist cheeses, making this an important market for the UK dairy sector.
Growing wealth in Mexico, as well as an increased focus on healthy and niche products, means there is strong potential for further growth for UK agri-food products, including dairy, fresh fruits and poultry products.
It is vital, however, that negotiators ensure our high domestic production standards are protected in any future FTA with Canada or Mexico, and that these deals will not allow the import of goods produced to standards that are not legal here. This includes maintaining the ban on beef produced using hormone growth promotants.
Negotiations must also be conscious of the cumulative impacts of trade deals on British agriculture, particularly with the expectation that deals with Australia and New Zealand could be agreed in mid-2021. With the UK’s ambition to join the CPTPP also a factor here, negotiators must ensure that these separate negotiations do not allow duplicate access for Canada and Mexico, or back door access for countries we have not secured an FTA with, such as America (should it wish to rejoin CPTPP, or via USMCA).
How to give your views
The NFU would like to hear opinions from members on trade deals with Canada and Mexico. Please email ZW1pbHkucm9hZHNAbmZ1Lm9yZy51aw== by 1 July 2021 with thoughts and information on: concerns about specific imports from these countries; information about specific farming practices; opportunities to send agri-food products to these countries; or anything else surrounding trade.
The NFU will be responding to the consultation, so any views submitted will feed into our response.
Members can also respond directly before the consultation closes at 11:45pm on 12 July 2021 here: Trade with Canada and Mexico: call for input.
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