Brexit: UK industry’s recommendations for future trade policy

28 Jan 2020 --- As Brexit day is just around the corner and trade negotiations between the UK and other nations begin, organizations from across the UK food and drink supply chain are urging the Government to develop a robust future trade policy. A new policy paper focuses on how the agri-food industry can take advantage of the opportunities created by leaving the EU and make a success of Britain’s independent status. It underscores the need for sustainable food at competitive prices, the importance of building new and closer links with trade partners and maintaining high food standards. 

Their ambition is for a future UK trade policy to drive growth, in the domestic supply and exports both to existing and new markets, stimulate innovation, while providing consumers with greater choice and better value.

The key recommendations in the paper include:
- Accommodating Rules of Origin and ensuring they are tailored to meet the needs of the industry;
- Giving business time to adapt to changes in competitive positioning arising from the creation of new trade agreements;
- Thought being given to the benefits and costs of choosing to move away from existing regulatory technical standards;
- Encouraging job creation and value addition in every region of the UK by prioritizing agri-food;
- Retaining the UK's ability to deliver high standards at competitive consumer prices;
- Encouraging sustainable food production, while diminishing environmental impacts.

“Food and drink businesses operate throughout the UK, creating jobs and income for people in every constituency. That is why we want to work with Government to ensure that we have the right policies to make a success of the UK's independent status, maintain our high food standards, improve our ability to deliver sustainably produced food at competitive prices and ensure these benefits are felt throughout the country," says Alex Waugh, Chair, Brexit Arable Group, and Director General, Nabim.

On the issue of increasing domestic supply and exports both to existing and new markets, the reports notes “trade policy needs to support the shared ambition, set out in the Agriculture and Environment Bills, to raise levels of sustainability in food and animal feed production and manufacture and reduce its environmental impact so that the UK leads the world in these fields. The UK is well known for the diversity of its food market along with the rate of innovation and new product development. Policy should encourage continued innovation and better support for businesses seeking overseas markets for their products.”

Trade policy principles
The report says that most trade negotiations aim to reduce levels of protection (from tariff and non-tariff barriers) to further the mutual interests of both sides. It notes how the UK already enjoys completely free and frictionless trade with EU countries, but now has the opportunity to build on these benefits in a series of new independent deals with others. 

“For the food and agricultural sector, this will require a clear approach to balancing the potential of new trade agreements with the possibility of new tariff or non-tariff barriers in trade with the EU, which is by an overwhelming margin, both our largest market and our largest supplier,” it says. 

“While the aim of all preferential trade negotiations is to seek mutually beneficial reduction in tariffs, the potential to offer market access concessions requires maintaining an appropriate applied MFN tariff that serves the interests of consumers, shoppers, and businesses. Furthermore, these are worthless without adequate Rules of Origin.”

The report also notes how the UK food and drink sector is “unusual in its tendency to use a mixture of imported and home-produced ingredients in manufactured foods.” Therefore, in all negotiations, and especially the one with the EU, the UK should seek accommodating Rules of Origin that are tailored to meet the needs of the industry, it stresses.

The paper has been developed by the cross-sectoral Food and Drink Industry Brexit Roundtable, convened by the Food and Drink Federation, and the separate Arable and Livestock stakeholder groups advising the Department for Environment, Food and Rural Affairs (Defra). 

“The food and drink industry is absolutely committed to working with Government and the devolved administrations on the development of more detailed plans and practical solutions for our vital industry as we leave the EU,” adds Ian Wright, Chair, Food and Drink Roundtable, and Chief Executive, FDF. “No industry is more uniquely placed to deliver the benefits of trade to every UK community. Together our supply chain produces, packages, distributes and sells a wide range of food and drink at every price point, more than ever before, in every corner of the UK.”

By Gaynor Selby