1.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.
2.The graph below shows the significance of the EU’s market to UK agriculture. It sets out the imports and exports of eight key agricultural commodities to and from the EU as a percentage of the total import and export of these goods.
Graph 1: UK agricultural trade with the EU
3.Brexit will fundamentally change our relationship with the EU. Currently the UK benefits from tariff-free trade within the EU, and the UK and other EU members levy common tariffs on products imported into the EU from other countries.
4.The Prime Minister, the Rt Hon Theresa May MP, stated that after the UK leaves the EU, it will cease to be a full member of either the Single Market or the Customs Union. In her speech on 17 January 2017, setting out the Government’s negotiating objectives for exiting the EU, the Prime Minister announced her intention to “pursue a bold and ambitious Free Trade Agreement with the European Union … [to] allow for the freest possible trade in goods and services between Britain and the EU’s member states”.
5.While we acknowledge the Government’s aims, we recognise that the timetable for withdrawal negotiations is tight, and concluding a free trade agreement (FTA) in the time available may be extremely ambitious. If an FTA is not reached, World Trade Organisation (WTO) rules would automatically apply to any trade between the UK and the EU.
6.We launched our inquiry on 20 October 2017. Our inquiry considered the impact of trading under WTO rules and the opportunities and challenges that different agricultural sectors could face.
7.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.
8.We took oral evidence from representatives from some of the main agri-food industries, such as sheep, beef, poultry, pork, horticulture, cereals, and the dairy industry. We also took evidence from consumer organisations, academics, Tim Martin (Founder and Chairman, JD Wetherspoon), and the Department for Environment, Food and Rural Affairs. We are grateful to those who provided oral and written evidence.
1 Department for Environment, Food and Rural Affairs ()
2 Agriculture and Horticulture Development Board
3 , 17 January 2017
12 February 2018