Unresolved issues around trade flows and border checks post-Brexit are continuing to harm UK producers, industry bodies argue. Michael Barker reports
Brexit might be becoming a hazy, pre-pandemic memory in the eyes of many Brits, but unresolved trade issues could put it back into the spotlight if it leads to further unwanted food price inflation.
That’s the fear of British Poultry Council (BPC) chief executive Richard Griffiths, who warned at the recent Trade Unlocked conference that ongoing asymmetry in UK-EU trade threatens to have a negative impact for consumers at the supermarket shelf.
Trade Unlocked, which was backed by the UK Trade and Business Commission and Best for Britain, brought together parliamentarians, businesses leaders and trade experts to build a blueprint for modern trade and boost growth to deliver a better future for all in the UK.
It comes at a time of tension between fresh food suppliers and the government, with suppliers having complained of an unlevel playing field favouring EU exporters to the UK while the government establishes its much-discussed – and delayed – border Target Operating Model.
That blueprint for trade must be underpinned by a shared set of standards that provide certainty and consistency for poultry meat businesses, according to the BPC. In a panel session focused on standards and regulation, Mr Griffiths said: “We need equality in trade. If we are to move forward as a sovereign nation, we need government to get serious about developing a set of standards they believe in and keep at the heart of trade. Only then will we have an opportunity to build positive relationships with trading partners.”
As is often the case with trade issues, above all else poultry meat exporters simply want certainty and consistency. Farming industry bodies have long since cried foul over the failure to implement full controls on product entering the UK from the EU, which they say hampers the chances of the UK operating a profitable and sustainable food system. “Import checks have been postponed four times in two years, costing BPC members millions, Griffiths noted. “The current system, that some industries are yet to feel the full weight of, is adding to already soaring production costs and eroding business viability. The longer disparity in UK-EU trade goes on, the harder it will get to address it.”
The figures don’t make for pleasant reading. According to the BPC, additional administration and red tape has cost exporters well over £100 million since 1 January 2021, while in the opposite direction EU exporters have paid nothing and “continue to enjoy a competitive advantage”. That has led to accusations that the UK government is failing to protect its country’s food producers and standards, adding to the inflationary burden at the most inopportune time. The situation “threatens to undercut domestic production with cheaper imports and push up food prices in the UK amid a cost-of-living crisis,” Griffiths observed.
The unbalanced trading environment is not the only Brexit-related issue that is preoccupying farmers. Lucia Zitti, senior adviser for international trade and global affairs at the NFU, says the EU and UK should build on the starting point of regulatory alignment and create a bespoke SPS (sanitary and phytosanitary) agreement that eases the burden on two-way trade between EU and UK. Noting that the UK will finally be implementing border controls on goods entering from the EU, such an easing would benefit both sides, Zitti says.
“The change in our trading relationship with the EU has undoubtedly had an effect on the volume of trade we have with the bloc,” Zitti continues. “Exports of GB agri-products to the EU have faced considerable trade friction since the end of the transition period. For example, every consignment of product of animal origin (POAO) requires an Export Health Certificate (EHC) signed by an official vet attesting to EU standards. The average cost of a veterinary officer certifying an EHC is £200, adding an estimated additional cost of £50 million to the cost of those exports in 2022. As a matter of priority, the UK government should seek agreement with the EU on digitising the certification of EHCs and consider financial support to assist with the cost of EHCs for SMEs.”
In accordance with the recommendations of the SPS certification working group ‘Minimising SPS friction in EU trade’ published in June 2021, the NFU agrees that efforts should be made to pursue closer veterinary arrangements with the EU, such as an option similar to the equivalence agreement between the EU and New Zealand, or alignment as with Switzerland.
“Ultimately both the EU and UK government should consider the possibility of negotiating a UK/EU/EFTA SPS zone,” Zitti concludes. “Such a zone could build on the foundations of mutual recognition and equivalence of each other’s regulations and standards, while also maintaining the individual parties’ right to regulate.”
It’s without question that across the UK’s primary food production industry, rising costs and insufficient market returns have forced producers to scale back – a factor that makes it all the more essential that a functional and fair import/export regime is in place. It all comes back to that level playing field. “It is vital that our standards aren’t dropped in pursuit of filling gaps on shop shelves that retailers aren’t willing to pay a fair price for,” Griffiths insisted. “Imported poultry must meet our standards as a condition of entry. That’s what a fair approach to import checks with the EU guarantees: a level playing field for UK-EU trade recognises our standards, backs our farmers and food producers, and ensures safe, affordable, and nutritious food for all.
“We all want to avoid the stress additional checks pose to food supply; exporting sectors and industries like our own have suffered the pains of Brexit – those so-called ‘teething problems’ – since day one. But the ongoing impact of an unlevel playing field is just as big a problem for accessible and affordable food. If ensuring quality food for all is the priority then levelling the playing field across industries, sectors and entire nations must take precedence.
“The cost of not having fair and reciprocated checks is greater than the burdens that come with them – particularly in the absence of an SPS agreement, in which those burdens could be addressed, and checks potentially scrapped altogether to let trade flow freely in both directions.”
EU remains main customer as animal exports rebound
The EU is still the UK’s largest customer, accounting for 67% of the value of sales in 2022, despite a three percentage point fall since 2019. The total value of food and live animal exports to the EU was £10.5bn in 2022, which is a year-on-year increase of 19%, but is still 6% down on 2019. According to the NFU, the outlook for 2023 is more positive on the export front to the EU, sitting at £2.7 billion for the first three months of the year, a figure that is up 15% on the same period in 2022.