EU

A cliff-edge Brexit scenario would result in the loss of 32,000 jobs in the EU livestock sector

How will a hard Brexit scenario affect the European Union’s meat industry? What impact could new trade agreements have on the EU meat trade? Is the EU prepared in the face of African swine disease outbreaks spreading further? All these questions were answered by Jean-Luc Mériaux, the Secretary General of the Livestock and Meat Trading Union’s (UECBV), in an exclusive interview for EuroMeatNews.

Posted on Oct 22 ,07:19

EuroMeatNews: There is talk at the EU level of negotiations regarding the redistribution quotas for hormonefree beef imported in the European countries in favour of the USA. How do you think other EU beef suppliers will react in case the outcome of these negotiations will be to split the quotas into two (one entirely allocated to the USA and another for all other supplying countries)? How would this redistribution affect EU’s current trade flow?
Jean-Luc Mériaux: The TRQ is linked to a Memorandum of Understanding (MoU) that fixes the hormone dispute between the
EU and the USA on a sustainable basis and contributes to eliminating the tariff barriers to trade.
If the USA does not get satisfaction, it will repeal the MoU while the EU will repeal the TRQ. Therefore, the alternative for the other suppliers is either to maintain a trade flow thanks to the continuation of the MoU or to lose market opportunities.
If the quantities are reallocated, his will not impact the overall EU beef imports as the TRQ volumes will not be changed.

EMN: Another important trade deal that is waiting to take place is the EU-Mercosur trade agreement. When it comes down to beef, could the lower cost South American products hurt the competitiveness of EU-based products? What are the challenges for the EU beef industry if this deal goes through?

JLM: An EU/MERCOSUR deal will have an impact on the MERCOSUR market share in the beef sector. Already today, MERCOSUR is
the first beef supplier of the EU. Its market share amounts to around 74% of the EU total beef imports.
The deal will improve the Mercosur beef access to the EU thanks to a new TRQ. This will mean, on one hand, an increase of the Mercosur market share and, on the other hand, further competition for the EU beef production and, more especially, the
high quality beef production that is the market segment mainly targeted by MERCOSUR.

EMN: In recent months, anyone could observe that the negotiations between the UK and the EU tend to lean towards a hard-Brexit scenario. How would such a scenario affect EU’s meat and livestock trade? 
JLM: A cliff-edge scenario would be a disaster for the EU meat market. A UECBV impact assessment demonstrates that the meat
trade from the EU to the UK will drop by 84% for beef and 48% for pork. As a consequence, the prices will fall by, respectively, 8.8% and 7.3% in a short-term and by 5.5% and 4.6% in a long term. All in all, the price shock would reduce the value of the EU
production of beef by €2.4 billion and of pork by over €2.3 billion. This scenario would result in the loss of 32,000 jobs in the EU
livestock sector. 

EMN: After numerous cases of African swine fever reported in Eastern Europe, the disease has reached Belgium. How will a  possible ASF spread to other countries affect trade flows? Is the EU prepared to deal with an ASF widespread?

JLM: Thanks to its experience and expertise, the EU is well prepared to manage, control and finally eradicate the African Swine Fever (ASF), even if it may be time-consuming. The disease appeared on the EU territory from the neighboring countries at the end of 2013. Ever since, the EU policy has succeeded in restricting the ASF to a limited number of regions while the ASF travelled over 2,000 km in China in less than two months. In addition, in most of the affected Member States, the disease hit either mainly the wild boar population or solely the wild board population as in Belgium, Hungary and in the Czech Republic.
Furthermore, the success story in the Czech Republic is promising. Finally, the implementation of the regionalization principle
within the EU and the enforcement of the Single Market mitigate the trade impact and safeguard the trade flows from the ASF-free regions.
Unfortunately, several external trade partners of the EU do not comply with the OIE recommendations with regard to regionalization and the distinction between the ASF in wild animals and the ASF in domestic pigs. The EU Commission and the
Member States are quite active towards such recognition. Hopefully, their efforts will be successful shortly.

EMN: The Trump administration has imposed a series of taxes on imported meat from different countries, including China. How do the US trade wars affect EU’s meat trade? Some say that the US trade war with China could be an opportunity for the EU to export more meat. What is your take on this?

JLM: A trade war can only be a loss/loss process in the long term as it creates uncertainty and instability. For instance, because
of the Chinese tariffs on pork, the US meat industry partly displaced the volumes from China to other outlets where the competition increased.
Regarding China, the EU pork did not take advantage of the trade tension. From January until July 2018, the EU pork exports
to China were stable (+0.9%) as compared to the same period of 2017, when EU exports dropped by 32%.
Then, in August and September, the Chinese market became unstable because of the ASF outbreak.

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