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Beyond Brexit: trade in goods Contents

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Chapter 5: Sanitary and phytosanitary measures

The TCA’s provisions

105.While we have focused on the provisions affecting trade in general, we heard specific concerns over sanitary and phytosanitary (SPS) measures, and their impact upon trade. The report of the EU Environment Sub-Committee addresses trade in plant and animal products in depth,138 but in this chapter we make some brief comments.

106.The absence of an agreement on equivalence of SPS standards means that UK-EU trade in animal and plant products is now subject to health inspections. The TCA’s SPS chapter places a duty on both sides to ensure that border controls are “proportionate to the risks identified” and do not create “unjustified barriers to trade”. Either Party may unilaterally reduce border checks to simplify the process of SPS imports.139

107.EU law prohibits the import of some goods from outside the bloc entirely—for example, chilled raw minced meat. Other products can be imported to the EU only if they meet standards that, we were told, make trade unfeasible, such as the purification required for live shellfish from most UK waters.140

108.The TCA creates a Trade Specialised Committee on Sanitary and Phytosanitary Measures to review and clarify both Parties’ SPS measures and to consider ways “to facilitate trade between the Parties”.141

Box 2: The WTO SPS agreement

The WTO agreement on the Application of Sanitary and Phytosanitary Measures (the SPS agreement) entered into force in 1995. The SPS agreement states that countries may set their own standards on food safety and animal and plant health, but that these regulations should be scientifically based and should not arbitrarily discriminate against countries where similar regulations prevail.142 Article 4 of the SPS agreement calls on members to accept the sanitary and phytosanitary measures of other members as equivalent, but only if the exporting member “objectively demonstrates” to the importing member that it meets its levels of sanitary and phytosanitary protection.143 Whether this criteria has been met is ultimately at the discretion of the importing member—the EU in the case of UK exports to the bloc. The TCA reaffirms the rights and obligations of the UK and the EU under the WTO SPS agreement.144

Physical checks

109.UK negotiators did not secure an agreement to reduce physical checks to a pre-determined low level, of the kind found in the EU-New Zealand veterinary agreement. The level of random physical checks for SPS products imported to the EU is set between 30% (for most meat, fish and dairy products) and 1% for a small number of products including hay and straw.145

110.The EU introduced full SPS controls on imports from the UK on 1 January 2021, whereas the UK is phasing in controls on imports from the EU. On 1 January, checks on imports from the EU of high-risk animal and plant products began. The Government initially planned that on 1 April it would introduce checks on all other SPS products and on 1 July would increase the rate of checks and require products needing SPS checks to transit through a designated border control post (BCP). However, on 11 March it announced a revised timetable, under which the requirement for new SPS paperwork is delayed until 1 October 2021 and additional SPS checks until 1 January 2022.146

111.Both the British Veterinary Association147 and Luke Hindlaugh of the Food and Drink Federation told us the TCA’s SPS provisions do “very little” to reduce trade friction, but the latter conceded that it “creates trust between both trading parties, which probably helps to manage some of those imports and exports and allows them to flow a bit better”.148 Nevertheless, the absence of equivalence is “really disappointing for the industry” and means the level of physical checks at the EU border, as noted above, is now up to 30% for products such as fresh meat.149

Paperwork

112.Additional paperwork has been introduced into the transit of SPS products. The key change, as the British Veterinary Association told us, is that to transport live animals or products of animal origin from Great Britain to the EU, exporters require an export health certificate (EHC) signed by an official veterinarian.150 Cheesemakers Alvis Brothers Ltd identified a range of measures that could simplify this process, the most compelling of which was investment in an electronic certification system.151

Box 3: SPS products and Northern Ireland

Under the Protocol on Ireland/Northern Ireland, Northern Ireland’s SPS requirements remain aligned with the EU’s. SPS products from Great Britain will therefore be subject to checks when moving into Northern Ireland. Some grace periods for required paperwork have been agreed and additional technical arrangements will streamline and minimise checks on SPS products.152 Having failed to secure the EU’s agreement to extend existing grace periods,153 the Government announced in early March that it was unilaterally extending—from the end of March until October—a grace period on official certification of SPS products moving from Great Britain to Northern Ireland, prompting the EU to threaten infringement proceedings.154

Short-term impacts

113.Although new requirements for documentation such as export health certificates have led to disruption, it seems likely that these problems will ease as traders adapt to the new environment. Luke Hindlaugh described them as “teething issues with how the paperwork is presented”. For example: “Have the stamps by the vets been done in the right colour? Are they numbered correctly?” He added that while “everyone is struggling to come to grips with some of the new processes”,155 in time “it will get better; businesses will understand some of the requirements”.156

114.For now, the British Veterinary Association told us, “There remain significant problems with the completion of EHCs, both in interpreting the requirements and with inconsistencies in interpretation and implementation at BCPs.”157 The British Poultry Council noted administrative errors and inconsistent interpretation of EHCs, and called on the Government to work with the EU “to agree clear and consistent instructions on the interpretation of the export health certificates to eliminate administrative errors”.158

115.Resolving these problems will come at a cost. Alvis Brothers Ltd said that it “will have mitigated much of the oncost” of the new arrangements within three months.159 Explaining that its members “have found themselves at the sharp end of the new trading arrangements as our fresh produce cannot be stockpiled and requires the most onerous EU paperwork”, the British Poultry Council said that while administrative problems “can and will be solved”, the solutions would require businesses to deploy “more people, more time, and more resources”.160

Long-term impacts

116.Of more serious concern is the requirement for physical checks of goods, which seems likely to have a long-term detrimental effect on UK-EU trade. David Thorneloe described SPS checks as “a major barrier to trade for the food industry”.161 Anna Jerzewska of Trade and Borders noted that “for products that are so much more dependent on quick movements”,162 SPS checks were particularly time-consuming. She told us that EU customers “are switching suppliers, which is an indirect lost-opportunity cost”.163

117.The Institute for Government pointed out that “a high proportion of businesses in the agri-food sector are small or microbusinesses”, for whom “new (ongoing) compliance costs are likely to have a larger effect on profitability”.164 Alvis Brothers Ltd said “the new arrangements are making us slower, less flexible and add cost”. It added: “We expect the longer lead time and reduced flexibility to remain unless future negotiations on the TCA gain some easements.”165

118.Luke Hindlaugh offered a sobering summary of the “cumbersome” SPS barriers that are “here to stay”.166 Citing the example of fish, he said:

“There are customs, catch certificates and EHCs. All have to be uploaded to separate systems. Even when you get all of them right and the stars are aligned, it takes quite a long time to get through some ports … You probably will not be able to get an order and ship it on the same day; it will take three or more days to get through. Inevitably, that will be a decision for customers in both the UK and EU to get to grips with. These things will take longer to get through. There is a chance that your lorry or truck will occasionally be pinged for a check, and that will delay it even more. The customer will face a choice. Do they want to take that risk or source from somewhere else?”167

Mitigations

119.As well as general language on avoiding unnecessary barriers to trade and the creation of the Trade Specialised Committee on Sanitary and Phytosanitary Measures, the TCA contains specific measures seeking to minimise friction. Nadiya Nychay pointed to:

• “commitments in the space of transparency, information exchange between the parties, and on matters related to the development of SPS measures”;
• a commitment to hold regular “technical consultations”;
• a “zoning” recognition that “if a given region in a partner’s territory is affected by a pest or a disease, goods that originate from other parts of the jurisdiction can continue coming in”;
• a mechanism “to approve establishments that provide guarantees on the safety of goods being exported”; and
• an agreement that the Parties cannot introduce new authorisation requirements.168

David Thorneloe argued that these “limited” provisions “chip away” at the barrier of SPS checks, but warned that it is “not a barrier that will be knocked down any time soon”.169

Potential measures

120.In its capacity as the London Port Health Authority, the City of London Corporation suggested several measures at ports, including “a phased introduction of the checks from the EU, starting at between 1 and 5% and increasing over time”. This, it said, would be reasonable given the likelihood of a “high level of compliance owing to the current alignment”.170

121.For GB-NI trade Alex Veitch of Logistics UK suggested a retail movement system, which is “essentially a trusted trader scheme for businesses in the food supply sector”, to simplify SPS requirements. He also recommended an extension of the current grace periods on EHCs for moving food products from Great Britain to Northern Ireland—a request partially met by the Government’s unilateral extension of the first grace period, as noted in Box 3.171

122.On 14 February, EU Commission Vice-President Maroš Šefčovič said a UK-EU agreement on common animal health and food safety standards, removing the need for some SPS checks, was “on the table”.172 However, the Institute for Government told us that while some issues “could be addressed through separate bilateral UK-EU negotiations on health certification”, there is “likely to be considerable reluctance from the EU to consider such measures while the UK keeps open the option of regulatory divergence on food standards”.173

123.Traders in animal and plant products have been hit harder by red tape than perhaps any others since 1 January. Many of their products cannot be stockpiled but face the most stringent checks. While some of the sector’s problems will improve as stakeholders gain familiarity with new requirements—at a cost—physical SPS checks could become a permanent barrier to trade in animal and plant products unless the UK and the EU can agree mitigations to the current regime.

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