UK-Chile Trade Deal Provide Latest Market Opening for UK Red Meat Exports

Published 2022년 3월 24일

The United Kingdom has signed a trade deal on pork exports with Chile worth GBP 20 million over the next five year. The trade deal follows recent deals involving red meat trade with Mexico, USA and Australia that have received mixed reception from the UK agricultural sector.

Chile’s growing pork market ready for U.K products

The United Kingdom has landed another trade deal on 17 March 2022 which will open the Chilean market for pork from 27 processing sites in the United Kingdom. The trade deal is believed to be worth GBP 20 million over the next five years and allows pork to enter Chile under the Most Favoured Nation Tariff of 6%. Pork production in Chile has been export oriented and stagnated in 2021 due to China’s production recovery while imports have gradually risen nearly tenfold from 17,753 mt in 2011 to 167,425 mt in 2021 on account of increased demand. Pork is the second most consumed meat type in Chile and consumption is expected to grow to 26.8 kg per capita by 2029.

Data source: Trademap

The deal with Chile follows an agreement with Mexico, USA and Australia in the U.K’s effort to expand their destination market pool after losing access to the EU inner market where, as an example, more than 94% of lamb exports were directed to before 2020. The recent trade deals have received mixed reactions among U.K farmers.

Mixed receptions of newly signed trade agreements

The deal with Mexico signed in 2021 has paved the way for pork exports and is believed to be worth GBP 50 million over the next five years. In 2021, Mexico imported 1,150,000 mt of pork of which the vast majority came from the USA ( 864,948 mt). It is now the hope that the UK can compete with their north american counterpart, particularly when it comes to meeting the demand for high quality and animal welfare products. Mexico is only the second Latin American country to open for UK pork after the Dominican Republic.

The amendments to the trade USA-UK agreement that entered into effect on 3 January 2022 allows for sheep/lamb meat to enter the USA and is believed to be worth over GBP 37 million over the next five years. The U.S is the world’s second largest lamb importer and imports around 110,000 mt per year primarily from Australia and New Zealand. Until the signing of the new trade agreement, UK sheep and lamb exports to the U.S had been restricted by the Small Ruminant Rule first put in place in 1997 over risks regarding Transmissible Spongiform Encephalopathie in cattle, goats and sheep.

The Australia-UK general free trade agreement has not yet entered force after being agreed upon in December 2021. It has been widely criticized by U.K farmers as they claim it lowers the environmental requirements and creates an uneven playing field with their partners Down Under. Critics argue that based on the UK government’s own calculations, the trade deal may cost the agricultural and fisheries sector in the UK upwards of GBP 94 million.. The safeguard levels and tariffs are deemed inadequate and the future scenario of no trade protection on meat products in 15 years time is concerning the UK meat producers farmers.