Brexit: Trade in Food Contents

Conclusions and recommendations

Tariffs on UK-EU exports under WTO rules

1.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. (Paragraph 27)

2.We note that the sheep, dairy and cereals sectors, those particularly dependent on the export market, will be most affected. (Paragraph 28)

3.While we recognise and welcome work that has been done by organisations such as AHDB in providing detailed sectoral analysis on the impact of tariffs on the UK’s agricultural sectors, it is imperative that Defra undertakes similar work as a matter of urgency to evaluate the impact of any deal that the Government might be negotiating. (Paragraph 29)

4.We recommend that Defra publishes a sector-by-sector analysis of the impact of Brexit before the publication of the Agriculture Bill. (Paragraph 30)

Fortress UK, applying WTO tariffs on imports

5.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. (Paragraph 47)

6.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. (Paragraph 48)

7.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. (Paragraph 49)

Trade liberalisation

8.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. (Paragraph 62)

9.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 industry post-Brexit. We would like to see the Government offer policies that would stimulate home grown food production. (Paragraph 63)

10.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. (Paragraph 64)

Tariff Rate Quotas

11.Post-Brexit, the UK will be responsible for setting its own Tariff Rate Quotas. This should be carefully considered as it will have an impact on England, Scotland, Wales and Northern Ireland. We call on the Government to announce these quotas as soon as possible, so that the UK agricultural industry can have trading certainty for 2019 and onwards. (Paragraph 71)

Regulations and Standards

12.Leaving the Single Market could lead to regulatory divergence. It is not yet clear if the Government intends to maximise UK sovereignty, at the cost of less access, or whether it intends to achieve maximum access, but with the loss of opportunity to create bespoke regulations for the UK’s benefit. (Paragraph 85)

13.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. (Paragraph 86)

Geographical indicators

14.Geographical indicators enable UK businesses to add value to their product and to assert provenance and quality. The Government must ensure that protected geographical indicators are retained in a similar form after the UK leaves the EU. (Paragraph 91)

Increased Cross Border Administration Paperwork

15.Export certification demands are likely to increase dramatically. We recommend that the Government set out how it intends to increase resources to ensure that trade is not affected by delays in the process. 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. (Paragraph 102)

16.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. (Paragraph 103)

Border Inspection Post capacity

17.Any change in our trade arrangements has implications for the smooth movement of goods between the EU and the UK, and could lead to serious disruption to supply chains. A future bespoke agreement must address the costs and delays associated with customs and border controls. (Paragraph 116)

18.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. (Paragraph 117)

Trade Agreements with Non-EU countries

19.On leaving the EU, if there is no customs union, the UK will be able to pursue free trade agreements with non-EU countries. It is essential that the Government identify those countries where resources should be targeted. 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. (Paragraph 127)

20.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. (Paragraph 128)

Country of Origin labelling

21.It is essential that consumers be fully informed about the food that they are consuming. Current food labelling under EU regulations is not sufficient. 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. (Paragraph 133)

12 February 2018