Memorandum by Food and Drink Federation
The Food and Drink Federation (FDF) is the voice
of the UK food and drink manufacturing industry, the largest manufacturing
sector in the country. In representing our members' interests,
FDF is focussing upon three core priorities: food safety and science;
health and wellbeing; and sustainability and competitiveness.
European trade policy falls under the latter.
As a major importer and exporter, our industry
supports trade liberalisation. To remain competitive in the global
market, FDF requires European trade policy to: secure access to
competitively priced agricultural raw materials for further processing;
retain some border protection for processed food and drink products
in recognition of the higher prices the Common Agricultural Policy
(CAP) requires us to pay for raw materials; and secure improved
market access for our exports to third countries.
FDF members' exports consist primarily of high
quality, value-added goods. Our priority markets for improving
access for our exports are the US, Canada, the European Free Trade
Agreement states, the Middle East and East Asia. On imports, the
EU seldom imposes high tariffs on products that cannot be produced
within the EU, such as certain fruits and vegetables, oils, coffee
and tea. Tariffs on more sensitive products, such as meat and
dairy, are often prohibitively high and imports are only possible
within tariff quotas.
1. What are the future prospects for multilateral
trade negotiations? What impact will the rising number of bilateral
agreements have on the existence and further development of multilateral
agreements?
Markets work best when they operate free openly
and freely. Accordingly, FDF supports multilateral trade negotiations
currently being pursued under the Doha Development Agenda (DDA)
to produce further trade liberalisation and a fairer and clearer
set of multilateral trading rules. It is clear that political
impetus is the key to successful multilateral trade negotiations.
We therefore urge the European Commission to be ambitious in its
approach to encourage a successful conclusion to the DDA.
FDF supports the development of bilateral Free
Trade Agreements between the EU and key trading partners as a
way of making early progress given the challenges to be resolved
under the DDA. Bilateral agreements can raise standards as a benchmark
for subsequent multilateral agreements and, moreover, they can
help speed up this process. Nevertheless, a rising number of bilateral
agreements could result in an overly complex set of trading rules.
FDF members, who operate in increasingly open and competitive
international markets, therefore prefer the multilateral process
as the best approach to trade liberalisation and consider bilateral
agreements to be complementary.
2. What role can European trade policy play
to stimulate growth and create jobs in Europe?
European trade policy is an essential part of
stimulating growth and creating jobs in Europe. The UK food and
drink manufacturing industry is the largest manufacturing sector
in the country and is important in so many respects. In particular,
we create wealth by generating about £21 billion of Gross
Value Added to the UK food chain each year and we create jobs
through employment, development and career opportunities for over
400,000 people across the UK.
The UK food and drink manufacturing industry
operates in a global market and is one of the world's largest
importers and exporters of food and drink products. Our industry
imported £24 billion worth of food and drink products as
well as exporting almost £10 billion worth food and drink
products in 2006. Without a strong and competitive European trade
policy, FDF members could not continue to expand their businesses
and access new markets opportunities. This in turn would have
a negative impact on economic growth and job creation.
3. What should the relationship be between
European trade policy and policies on development, climate change
and the depletion of natural resources?
European policies should be joined up. The European
Commission should consider the impact of both internal and external
polices on the EU industry's ability to trade competitively both
at home and abroad. A number of domestic policies undermine, or
threaten to undermine, our industry's competitiveness. For example,
whilst successive rounds of CAP reform are moving EU agriculture
towards market orientation, further reform is required to safeguard
the long-term competitiveness of the food and drink industry.
Moreover, EU and Member State biofuel incentives or the imposition
of mandatory biofuels' targets are of serious concern as they
give rise to competition between food and fuel.
FDF therefore encourages the European Commission
to press for completion of CAP reform in a manner which ensures
a level playing field between member states and leaves the EU
competitive with the rest of the world. We also urge the Commission
and UK Government to ensure its biofuels' policies avoid conflict
between food and fuel given the adverse implications for food
supplies—availability, price and consumer inflation.
4. Have developing countries benefited from
multilateral trade agreements? What steps should European trade
policy take to help less developed countries reap benefits of
global trade?
Developing countries can benefit from improved
market access opportunities that multilateral trade agreements
can provide. Moreover, the EU has many initiatives to help developing
countries reap the benefits of global trade including Economic
Partnership Agreements (EPAs) and Everything But Arms (EBAs) initiative.
FDF supports the rapid conclusion of the EU's
Economic Partnership Agreements (EPAs) with African, Caribbean
and Pacific (ACP) countries. A gradual transition towards trade
liberalisation will allow ACP countries to participate in the
global trading system and foster economic development. EPAs will
not only provide market access opportunities but also regional
integration and the strengthening of supply side capacities.
5. Is there still a need for Trade Defence
Instruments, and if so, how can these be designed to ensure that
there effects are targeted and proportionate?
Goods being exported at a price below their
normal value due to subsidies, tax breaks or soft loans, for example,
amount to unfair trade and lead to injurious effects on companies
and sectors which are placed at a disadvantage. Trade defence
instruments (TDIs) play a legitimate and necessary role in correcting
the injurious effects of unfair trade and are therefore supported
as a remedy. However, TDIs can themselves give rise to unfair
trade if they are designed merely to protect domestic industry
from the rigours of legitimate global competition. The FDF supports
the former but not the latter.
TDIs must take into account the changing patterns
of EU interests in the context of globalisation. For example,
some EU companies have off-shored all or part of their production
but still retain the vast bulk of their economic activities in
the EU where value is added and employment remains significant.
They do not sell directly to the market where production takes
place, so EU TDIs ought where possible to seek to embrace their
interests within a widened definition of European interests.
6. What is the approach for ensuring that
Intellectual Property Rights are protected? Do these rights hinder
development goals—and if so, how can an appropriate balance
be struck?
Intellectual property right (IPR) infringements
are a serious concern to the UK food and drink industry, as some
of our members' brands have been fraudulently copied in third
countries. The strong connection consumers have with certain brands
is vital for a successful company. Counterfeit food and drink
products threaten to destroy a brand's reputation through lower
sanitary and qualitative standards, which more importantly can
endanger consumer health. FDF does not agree with the view that
IPR can hinder development goals. Our members' branded products
have the right to protection on the global market. European trade
policy must consider necessary mechanisms to ensure that third
countries adhere to brand registration and protection regulations.
7. Is there still a role for the World Trade
Organisation (WTO) in the 21st Century?
FDF agrees that there continues to be a role
for the WTO in the 21st century. Ukraine has recently been approved
as a new member of the WTO—its 152nd member—and hopefully,
Russia will also be joining shortly. Countries still want to join
the trade organisation and are prepared to reform their legislation,
open markets and implement WTO-compatible measures in order to
join. The WTO is the only global international organisation dealing
with the rules of trade between countries. It enables its members
to settle trade disputes fairly, take advantage of markets openings
and gives them a clear set of multilateral trading rules.
26 February 2008
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