Industry leaders give stark warning on Brexit trade

The UK food and farming sector must secure a good transition deal to smooth the country’s exit from the EU if it is to avoid sleepwalking into a fully blown crisis.

The stark warning was made during a session exploring the effect of Brexit on trade and investment in agriculture at the NFU conference.

With the threat to slap steep tariffs on UK agricultural products, the Institute of Directors’ (IoD) Allie Renison warned that reverting to World Trade Organisation (WTO) rules to govern trade between the UK and the EU would be “a highly undesirable scenario”.

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Ms Renison, head of Europe and trade policy at the IoD, said a free-trade deal is a priority outcome and there was a growing sense that a UK-EU “zero-to-zero deal” on tariffs would be agreed, but warned this might not include agriculture.

But she added: “Agriculture has to form part of a tariff-free extension. My fear is that as a compromise you will have the EU suggesting a phase-in of tariffs over 20 to 30 years. That’s certainly better than having them [tariffs] put in right away.”

Transitional deal ‘vital’

Ian Wright, director general of the Food & Drink Federation (FDF), said a transitional trade deal between the EU and UK was “absolutely vital” for the food and farming sector.

“It is important that ministers get the transition deal right before they start worrying about the free trade agreement,” he added.

“The transition deal and the arrangements have the real capacity to completely derail us.”

Mr Wright recalled the fuel strike by tanker drivers in 2000, which he said “nearly brought down the Blair government”.

He said: “Just imagine if we don’t get the transition deal right? How would Operation Stack look as it curves around the M25?”

Taking the example of Ireland, Mr Wright said cross-border trading was “critical” and the island was “effectively a single market for food and farming”.

Cross-border controls

The government needed to guarantee “frictionless” arrangements for cross-border controls of foods after Brexit.

He said: “One in five cows across Ireland produces milk for Baileys. If you are the producer of milk in Northern Ireland, your milk crosses the border five times before the bottle is sold.

“Imagine the damage that would be wrought by having to go through customs posts on each of those five occasions? The same is true for meat and poultry in the North.”

NFU deputy president Minette Batters stressed the need for the UK government to carry out an impact assessment of the consequences trading under WTO default rules would have on rural Britain.

“If we don’t have a deal and we default to WTO rules, tariffs could be in place that price us out of the marketplace. There is a clear need for government to do this work. It’s not something we can analyse in two years’ time.”