Brexit: Trade in Food Contents
The UK’s food and farming industry generates over £110 billion a year and employs one in eight people in the UK. Trade is vital to the industry. The EU is the UK’s single largest trading partner in agri-food products, accounting for 60% of exports and 70% of imports.
Brexit will inevitably introduce friction to trading routes. Our Report focused on the impact to different agri-food sectors of the UK having to trade under World Trade Organisation (WTO) rules, in the event that the UK and EU fail to reach a trade agreement.
In withdrawing from the EU, the UK will withdraw from the Common Agricultural Policy (CAP). We intend to look at the Government’s proposals to replace CAP later in this Session.
The Committee’s key recommendations and conclusions are:
- The EU is the UK’s most significant trading partner. Although the Government’s intention is to agree a comprehensive free trade agreement and customs agreement with the EU, there is no guarantee that this will occur. In the event that the UK leaves the EU without a free trade agreement, UK-EU trade will proceed under World Trade Organisation (WTO) rules. Reverting to WTO tariffs will have a significant impact upon agriculture as tariffs are higher for agricultural products than for other goods and services.
- We recommend that Defra publishes a sector-by-sector analysis of the impact of Brexit before the publication of the Agriculture Bill.
- The agricultural industry needs clarity as to the Government’s long-term vision and future support. We call for the publication of the Agriculture Bill as soon as possible.
- The Government needs to support British farming and agriculture in preparing for business post-Brexit. Defra should consider providing a fund to support our food producing industry to adapt effectively to the challenge ahead.
- The Government should consider what support can be offered to sectors where imports into the UK and exports out of the UK are roughly equal, such as the dairy industry, that can make us more self-sufficient. This would offer these sectors an opportunity to become more productive. It would give people the confidence to invest, keep food prices down and keep farmers in business.
- When establishing its own tariffs at the WTO, the Government must give careful consideration to the impact on the UK’s agricultural industry. High tariffs on imports would raise the cost for consumers while removing tariffs could lower the cost for consumers but have a devastating effect on the long-term future of the UK’s agricultural industry. Such a move could put many UK farmers out of business, which would be detrimental to the rural economy, and render the UK dependent on imported food.
- The Government has offered no clarity to the agricultural industry on its post-Brexit policy. The Government must offer this clarity and stability so that the industry has the confidence to invest and take advantage of the opportunities offered to the sector post-Brexit. We would like to see the Government offer policies that would stimulate home grown food production.
- The UK has an international reputation for high animal welfare, environmental and food standards. These must not be sacrificed on the altar of cheap imports. Doing so could undermine the premium British brand and might affect our ability to negotiate trade deals with other countries. We will hold the Secretary of State to his assurances that there will be no compromise on animal welfare, environmental and food standards.
- The Government must make it clear to industry how it intends to deal with potential regulatory divergence with the EU, and the mechanisms it will put in place to track divergence in the future.
- The Government must ensure that protected geographical indicators are retained in a similar form after the UK leaves the EU.
- It is imperative that the Government invest in IT systems to support a more efficient export certification process in order to minimise delays to trade.
- Non-British EU veterinary surgeons are critical to the UK veterinary workforce. The Government must set out how it intends to ensure working rights for non-British EU vets currently working in the UK and to support the veterinary workforce going forward to ensure that it can meet the needs of the UK’s food industry in the future.
- Delays at border inspection posts lead to increased costs, and are a threat to perishable goods. It is imperative that the Government sets out how it intends to ensure that the right IT systems and infrastructure are in place for the import and export of agricultural produce so that businesses can continue to trade smoothly with Europe, including the Republic of Ireland, and the rest of the world.
- The Government must start developing relationships at a high political level with potential trading partners in order to ensure that agreements are signed to the benefit of the UK. The Government must also investigate how it can utilise the expertise within the House of Lords and House of Commons in building relationships and representing the UK overseas.
- While we recognise the huge benefit that trade agreements could bring, these must not at the detriment of the UK’s reputation for high animal welfare, environmental and food standards. The UK Government must not allow imports that that have not been produced to the UK’s high standards.
- We recommend that the Government improve country of origin labelling following the UK’s departure from the EU. We also recommend that the Government introduce mandatory method of production labelling.