Potential Boost for Scottish Shellfish Exports
A forthcoming agriculture agreement between the UK and the EU is expected to reduce Brexit-related trade barriers, potentially increasing sales of Scottish langoustines and oysters, the House of Lords has been informed. However, the agreement will not eliminate all associated paperwork.
Sanitary and Phytosanitary Agreement Progress
The UK and EU are close to finalising a sanitary and phytosanitary (SPS) agreement aimed at easing trade obstacles caused by Brexit. While the impact on the UK economy is anticipated to be "modest," the agreement is regarded as significant by members of the European affairs committee, who received updates on Tuesday.
The agreement would end physical inspections of farm produce and remove the requirement for veterinary certificates, which currently cost £200 each. Additionally, it could eliminate the need to label food products as "Not for EU," a practice that has posed challenges for wholesalers and distributors.
William Bain, head of trade policy at the British Chambers of Commerce, stated, "It could also remove the need to label food as ‘Not for EU’, which has been ‘a significant problem’ for wholesalers and distributors."
Bain, who is Scottish, highlighted that the deal could reopen export opportunities for Scottish langoustines and molluscs. Prior to Brexit, these shellfish were fished and could be served in Paris within a day. Many exports ceased due to border checks that reduced the seafood’s shelf life.
Despite these improvements, the SPS agreement will not eliminate all paperwork. British exporters will still be required to complete customs, VAT, and safety and security declarations.
Labour’s Dynamic Alignment Proposal
Labour has proposed reducing trade barriers for food exporters by applying all future EU rules and regulations related to farm produce under a system known as "dynamic alignment." Negotiations are underway to accept the 76 laws that have either been passed in Brussels or from which the UK has diverged in the farm food sector.
Alternative Approaches and Trade Leverage
On Tuesday, peers were informed that the UK could have pursued an alternative approach, such as "mutual recognition" of food standards, similar to the trade relationship between New Zealand and the UK. This approach would have removed the need for dynamic alignment with the EU.
Shanker Singham, chair of the Growth Commission and former adviser to MPs on Brexit arrangements in Northern Ireland, said, "The UK had significant commercial heft in talks, with about 23% of the EU’s global exports of agrifood going to the UK – with ‘much less’ going the other way."
Singham noted that the EU implemented all Brexit rules at Dover and beyond from day one, causing up to 20,000 British businesses to cease exports to the bloc. In contrast, the UK did not apply border controls in the same manner, opting for random inspections on fresh food.
He added, "The interesting thing here is that the UK government hasn’t really used the leverage it has."
Singham suggested that the UK could pursue a system of mutual recognition of standards, as practiced by New Zealand and Australia, rather than dynamically aligning with the EU.
He advised, "If you don’t ask, you don’t get. One has to be very, very careful when one is giving away one’s own regulatory authority in any area."
Expert Views on Dynamic Alignment and Mutual Recognition
Sam Lowe, head of trade and market access practice at Flint Global, explained that the advantage of dynamic alignment is the near elimination of physical inspections, a benefit that a New Zealand-Australian style mutual recognition deal would not provide.
He said, "What we’re actually asking for is the EU to recognise our dynamic alignment, and in doing so, treat our exporters better."
Lowe noted that EU exporters benefit because the UK recognises their rules, and the UK is requesting reciprocal treatment.
He added, "So what we are actually doing is asking them to give us something back on that."
