Environment, Food and Rural Affairs - Parliamentary Select Committee identifies Brexit winners and losers.
The Committee in its report published on 18 February 2018 called for: a fund to prepare British farming for Brexit; a specific impact analysis for each agricultural sector; plans for physical and IT infrastructure to be drawn up now; and, for new trading partnerships to be explored.
Neil Parish, Chair of the Environment, Food and Rural Affairs Committee, noted that: "60% of the UK's agricultural exports and 70% of its imports are from the EU. In order to safeguard the livelihoods of UK farmers and guarantee domestic food security post-Brexit, it is vital that the Government articulates its vision for protecting both.”
We commend the Committee for its approach in identifying how the pattern of winners and losers varies depending on the ‘scenario’ that UK leaves the EU – and in particular, the Common Agricultural Policy. The report highlights the impacts on consumers and on farmers – and the impact on shop prices will be a result of the deal that is reached.
Summary of report conclusions and recommendations:
Impact of 'no deal' on trade
The report focuses on the impact on different agri-food sectors of the UK having to trade under World Trade Organisation (WTO) rules in the event of no deal being reached between the UK and EU. This is particularly pertinent given the UK's simultaneous withdrawal from the Common Agricultural Policy (the impact of which will be specifically considered by the Committee at a later date).
The report concludes:
That the EU is the UK's most significant trading partner and there is no guarantee that a free trade agreement will be reached.
WTO tariffs could possibly lead to higher costs for consumers but could lead to beneficial import displacement. A liberalisation of barriers could possibly lead to cheaper imports, produced to lower welfare standards, and damage British producers.
The agricultural industry needs clarity on the Government's long-term vision, as reverting to WTO tariffs will have a significant impact on agriculture, given that tariffs are higher for agricultural products than for other goods and services.
Perishable agricultural products are more at risk from lengthy customs procedures and poor IT systems.
When setting UK tariffs at the WTO, Government should understand that removing tariffs 'could put many UK farmers out of business and render the UK dependent on imported food.'
The Committee calls on the Government to:
Consider creating a fund to support the UK's agricultural sector as it adapts to the post-Brexit environment.
Set out how it will make sure that IT systems and infrastructure are in place for the import and export of agricultural produce so that businesses can continue to trade smoothly with Europe and the rest of the world.
Begin to develop relationships at a political level with potential new trading partners.
Publish a sector-by-sector analysis of the impact of Brexit before the publication of the Agriculture Bill, and publish the Bill as soon as possible.
Ensure that any new agreements are not to the detriment of the UK's high animal welfare, environmental, or food standards.
Make clear how it will deal with potential regulatory divergence with the EU, and ensure that protected geographical indicators are retained in a similar form after the UK leaves the EU.
Safeguard the livelihoods of UK farmers
Parish: "The first step in this process is creating an analysis of each farming sector before bringing the Agriculture Bill before Parliament.
UK agriculture will need to adapt to the changed trading circumstances following Brexit, so the Government should consider putting funding in place to enable farmers to do so.
It is crucial that the Government takes positive political action towards new trading relationships as a matter of priority.”
In the broader view as UK moves from the shared EU regulations on such matters, he said that: “we should under no circumstances compromise on our world-renowned animal welfare, environmental, and food standards. Brexit should be an opportunity to improve, not undermine, our global reputation for quality."
The full 40 page report is available in the public domain – and Brexit-Partners are happy to share further insights. Please contact us to discuss further.
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