While the industry might have breathed a sigh of relief when the deal with the EU was signed on December 24, Andersons the Farm Business Consultants warn, however, that those who believed that trade issues had been put-to-bed for the foreseeable future were likely to be disappointed
Director Richard King said that even at 1,246 pages, the UK/EU ‘Trade and Cooperation Agreement’ (TCA), did not represent the final word on trade with the European Union.
And pointing to many of the issues which have cropped up during the first four weeks of the new arrangements he said,
“The next few months will see how the complex provisions of the deal in areas such as Rules of Origin, Customs and Checks impact on trade in practice.”
And while many of the loose ends which still need to be tied up mean that negotiations will continue with the EU for the foreseeable future, the danger for the farming sector is that it might get drawn into these negotiations as ‘leverage’, said Mr King.
Speaking ahead of a webinar on trade issues to take place on February 11, King said the TCA also required the maintenance of a level playing field on environmental issues and labour laws – and any significant undercutting could lead to retaliatory tariffs. “And farm goods are likely to be a key target for any such tariffs.”
He said that how the level-playing-field rules would work in practice was very unclear.
“For example, if the UK were to authorise GM crops, or at least gene-edited crops, would the EU see this as a reduction in ‘environmental standards’? The scope for arguments seems huge.”
And he said that while the likelihood of a quick deal with the US – and with it chlorinated chicken and hormone beef – seemed less likely with the change of administration, negotiations were already underway with many other countries which placed a high level of importance on their farm exports – such as Australia, New Zealand and the South American Mercosur nations.
“The danger for farming in all of these potential deals is that the UK government may be willing to trade access to our agricultural markets for gains for our exporters elsewhere in areas such as aerospace, financial services, medicines etc.
“The UK farming industry needs to ensure it is not made a sacrificial lamb”.
And there were also concerns on the current tariffs on food imports from countries without a trade deal.
King said that while the current levels set by the UK Ggovernment were close to matching those of the EU, they were temporary and any dramatic change to the UK’s economic performance – such as the Covid shock - could see the government tempted to drop these and move to a ‘cheap food’ policy.