Food industry calls on government to secure FTA before leaving EU
Ahead of Prime Minister Theresa May triggering formal divorce proceedings with the European Union on Wednesday, industry bodies from the food sector have called on the government to secure a trade deal before the country leaves the bloc.
In a joint letter by the National Farmers Union, the Food and Drink Federation and the British Retail Consortium (BRC) released on Monday, they said that to secure a free trade deal before leaving the EU could lead to higher food and drink prices if supply is not safeguarded.
Article 50, the clause of the Lisbon treaty which starts a two year clock on exit negotiations with the EU, is to be triggered on Wednesday amid concerns that the government may not secure a trade deal within the legally specified period. There are upcoming elections in April and May in France and in September in Germany which could delay negations.
The Prime Minister previously said that “no deal was better that the bad deal” and recently Brexit secretary David Davis admitted that that government has not done an economic assessment of what a “no deal” scenario would mean for the country.
The food groups said that if no trade deal is reached the food industry in Britain would suffer with consumers bearing the brunt.
“To keep prices low for consumers, it is particularly important that we don't have any new tariffs and we maintain frictionless movement of goods and put consumers at the heart of this." Helen Dickinson, director general at the BRC, whose members include Netsle and Tesco, told the Mail on Sunday.
They called on the government to “ensuring a smooth and orderly Brexit by agreeing transitional arrangements that maintain frictionless trade in goods between the UK and the EU”, avoid costly and disruptive customs checks, processes and procedures.
The groups claimed that the UK food supply chain employs 3.9m people from farming, manufacturing, retail and food services and generates £108bn for the economy.
In the medium term, the group wants to avoid customs duties on trade by securing an bilateral free trade agreement with the EU that delivers two-way tariff-free trade, establish the UK as an independent member of the World Trade Organisation, adopt the EU’s schedule of most favoured nation bound tariff rates, and secure benefits for UK traders of existing EU preferential trade arrangements. This includes the UK’s fair share of tariff rate quotas for agricultural imports, as well as of any preferential access for UK food and drink exports, or at least until government can replace them.
They also call on the government engaging in formal trade negotiations with third countries, establishing cooperation with third countries on regulatory equivalence as well as consult with stakeholders and undertake detailed economic impact assessments when trade negotiations are opened and before any offers are accepted.