The EU and Britain on Wednesday set out the ways they plan to divide prized agricultural import quotas after Brexit, a highly sensitive topic that has already sparked loud warnings from export powerhouses, including the US.
In an effort to avert a bitter feud, the EU and Britain wrote a carefully worded letter to their World Trade Organization (WTO) counterparts saying they were committed to providing “clarity and to work constructively and openly with international partners”.
“Both the UK and the EU would like to reassure our WTO partners that we will strive to minimise disruption to trade as the UK leaves the EU,” the letter said.
The burgeoning row is over the WTO’s “tariff rate quotas”, a carefully negotiated allotment of trade privileges that are extremely valuable to farming-dependent exporters.
In an elaborate system, the quotas allow low-tariff imports of meat and dairy products up to a certain volume with tariffs increasing after that.
The EU-British plan calls for existing quotas to be split after Brexit based on as yet defined historical patterns, which would crucially avoid a painful renegotiation at the 164-country WTO in Geneva.
But last month, a group of farming powers including the US voiced their grave concern that their hard-won access to the European market would be short-changed after Brexit.
The angry missive came as a shock to London, which has trumpeted its close ties with Washington and indicated that it will be able to secure a swift trade deal with the US after its divorce from the EU, probably in March 2019.
“It is our shared expectation that all countries which are currently member states of the European Union, including the United Kingdom, will fully honour their TRQ commitments,” said a joint letter from the countries, addressed to Britain and the EU.
First reported by the Financial Times, the letter insisted that the matter was not “technical” and that “none of the arrangements should be modified without our agreement”.
The letter was signed by Argentina, New Zealand and the United States, along with Brazil, Canada, Uruguay and Thailand.