98.As a member of the EU’s customs union, the UK’s trading relationships with non-EU countries have been determined by the EU. Outside the EU, the UK Government will be free to negotiate new trade agreements.
99. As discussed in Chapter 2, WTO rules require countries not to discriminate between trading partners. An exception is made, however, where a free trade agreement (FTA) has been negotiated, and so negotiating new FTAs could be a way of importing some food at lower prices without universally lowering tariffs.
100.Some witnesses suggested that leaving the EU could therefore result in more food being imported from non-EU countries, to the benefit of consumers. Professor Tim Benton said: “At the moment, within Europe, you have this preferential trade transfer whereby Europe is slightly protectionist, so we might get a benefit from lower tariffs externally, by coming out of Europe, from that perspective”.
101.Similarly, the British Retail Consortium stated:
“The EU’s external tariffs for agricultural produce are high and lowering these would make a difference. An area of interest would be citrus fruit, grapes and top fruit, with South Africa an obvious trade partner, but also the USA and parts of South America. Some of the highest tariffs are beef and dairy products, for which Australia and New Zealand could be future sources. We don’t anticipate this replacing UK dairy and meat, rather offering an alternative to imports from the EU”.
102.Referring to the food that the UK currently imports from the EU, Sue Davies from Which? cautioned that: “A lot of that food is not stuff that can easily be replaced with food that comes from other countries. It is quite distinctive”.
103.This is consistent with the evidence we heard during our ‘Brexit: agriculture’ inquiry, when the Institute of Grocery Distribution told us: “Reduced trade in agriculture and food with the EU might be offset, at least in part, by increasing trade elsewhere but there is no single country or trading bloc that could be a like-for-like substitute”.
104.Our ‘Brexit: farm animal welfare’ inquiry heard concerns about importing food from countries with lower welfare standards. The British Egg Industry Council, for example, told us: “As the government presses ahead on negotiating bilateral Free Trade Agreements with other (non-EU) countries, it could be tempted to allow imports of cheap products, produced to lower standards than our own, in an effort to keep a lid on food price inflation”. The Agriculture and Horticulture Development Board told us that “if the ‘free trade’ ambition is successful it will be difficult to stop the UK market from being flooded with imports produced to different and by inference, lower welfare standards”. And Minette Batters, Deputy President of the NFU, said: “We see the greatest threat to welfare coming from products coming on to this market that are produced to different standards and within a different regulatory framework”.
105.Witnesses to this inquiry echoed these concerns. Professor Tim Benton said: “If we are buying more stuff from further away, typically it is less regulated. Typically, it is going to have a higher environmental impact. Typically, it will come into the country with lower quality … Typically, it might have more impact for people who are producing it overseas”.
106.The National Pig Association agreed, pointing to the use of sow stalls, ractopamine (a feed additive) and antibiotic growth-promoters, all of which are permitted in the United States, Canada and Mexico, but banned in the EU.
107.Which? expressed similar concerns:
“Caution is needed where countries have lower standards. Food has to be of the quality and standard that consumers expect … production practices that raise consumer concerns such as the use of animal cloning, antibiotic growth promoters, weaker hygiene standards using chlorine washes for poultry production or use of growth promoting hormones, which are allowed in some countries but banned in the EU, should not be permitted in the UK”.
108.This potential challenge was recognised by the Minister, in his evidence to our ‘Brexit: agriculture’ inquiry: “Beef produced in Brazil, Uruguay and the US is cheaper than in the EU and, in particular, in the UK, but that comes at a price of using hormones in beef and all sorts of approaches that probably would cause consumer reaction here, and the quality of that product is far inferior to what we have”. He reiterated the Government’s approach in evidence to this inquiry: “We will not water down standards in pursuit of a trade deal. There are ways of dealing with these issues. You can do a trade deal for particular products raised to a particular specification that meets equivalency with your own domestic market”.
109.The Minister’s approach was in line with the views expressed by witnesses to our ‘Brexit: farm animal welfare’ inquiry—Peter Stevenson, Chief Policy Advisory for Compassion in World Farming, for example, recommended that “when negotiating new trade agreements, the Government should insist on the inclusion of a clause that permits the UK to require imports to meet UK standards”.
110.There is also a commercial risk to opening up the UK market. Professor Tim Benton noted that importing cheaper food from other countries would affect UK producers:
“Current retail prices for sirloin steak in the US is £12.67 per kg and in the UK is £22.06 per kg—so a trade deal, opening the UK market to US beef, would likely undercut UK produced prices by some considerable margin. Would our farmers seek to reduce standards to compete, or would they stop producing beef? If so, what might happen to the UK agricultural economy and the wider rural economy, as well as the way land is managed in our ‘green and pleasant land’?”
111.The NFU warned that “this sort of trade liberalisation scenario would have a hugely negative impact on the viability of many British farms”. Giving evidence to our ‘Brexit: agriculture’ inquiry, NFU Cymru told us that lowering tariffs on food imports from New Zealand and Brazil “would have a devastating impact on Wales’ livestock industry”, and Scottish Land & Estates said: “Trade deals that open our markets to cheap imports could prove disastrous for some agricultural sectors”.
112.Food is a global commodity, and Professor Benton warned that the UK, once outside the EU, might not be an attractive market. He gave the example of citrus fruits, where “Peru and Chile are the most resilient alternatives. These producers, as well as being very distant, typically supply to China and the US. Against these competitors the UK is viewed negatively as a low volume and high specification customer”.
113.Similar views were expressed by witnesses to our ‘Brexit: agriculture’ inquiry. The British Poultry Council, for example, told us: “Contrary to popular belief, third countries are not able to ‘take up the slack’ in trade that may be caused by Brexit … loss of trade with [EU] Member States will not inevitably lead to increases elsewhere”.
114.Giving evidence to this inquiry, the Minister said: “There will be some opportunities for new trade deals … [but] it is important not to exaggerate the opportunities … There is already quite a lot of trade that takes place. The impacts of these new agreements are probably less than some people would presume”.
115.When it leaves the EU, the UK will be able to negotiate new trade agreements with non-EU countries. This could offer an alternative to EU imports, if these become more expensive or less available, and could result in cheaper food prices for consumers.
117.We have heard significant concerns from a range of organisations, during this inquiry and previous inquiries, that cheaper food imported from non-EU countries is likely to have been produced to lower animal welfare and food safety standards, and that it could undermine the competitiveness of UK producers.
118.We welcome the Government’s commitment that animal welfare standards will be maintained. We reiterate the conclusion of our ‘Brexit: agriculture’ inquiry, however, that it will be difficult to reconcile this commitment with a desire to become a global leader in free trade. Ensuring food imports meet UK standards will require a rigorous inspection regime, and we call on the Government to detail what arrangements it will put in place to implement such a regime.
119.We note that some witnesses, including the Minister, feel opportunities for new trade deals are limited. Given that, and given the Government’s commitment to ensuring imports meet UK standards, it seems unlikely that imports from outside the EU will have much effect on the price or availability of food.
125 Written evidence from the British Retail Consortium ()
127 Supplementary written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2016–17), IGD ()
128 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: farm animal welfare (Session 2017–19), the British Egg Industry Council ()
129 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: farm animal welfare (Session 2017–19), the Agriculture and Horticulture Development Board ()
130 Oral evidence taken before the EU Energy and Environment Sub-Committee, inquiry on Brexit: farm animal welfare, 5 April 2017 (Session 2017–19), (Minette Batters)
132 Written evidence from the National Pig Association ()
133 Written evidence from Which? ()
134 Oral evidence taken before the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture, 8 March 2017 (Session 2016–17), (George Eustice MP)
136 Oral evidence taken before the EU Energy and Environment Sub-Committee, inquiry on Brexit: farm animal welfare, 5 April 2017 (Session 2017–19), (Peter Stevenson)
137 Written evidence from Professor Tim Benton ()
138 Written evidence from the National Farmers’ Union ()
139 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2017–19), NFU Cymru ()
140 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2017–19), Scottish Land & Estates ()
141 Written evidence from Professor Tim Benton ()
142 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2017–19), the British Poultry Council ()