Farm Business customs special – Beware liberalised trading

This week’s Farm Business digital magazine is posing the question: Are we any wiser after the governments published its plans for future customs arrangements with the EU and beyond.

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In a special edition, Roythornes’ Julie Robinson outlines what the different options set out in the paper mean for trade in agricultural goods. Caroline Stocks looks at how the proposals have gone down in Brussels and Dublin, highlighting the task that lies ahead for the UK negotiators.

NFU president Meurig Raymond gives his response, welcoming plans for transitional customs but calling for more long-term clarity.

Editor Alistair Driver looks at a report by the Food and Agriculture Research Policy Institute’s (FARPI) on the impact different future trade scenarios could have on the different sectors of UK agriculture.

A bespoke FTA with the EU would ensure limited disruption to trade. UK producer prices will increase slightly for sectors that are net importers – a beef price rise of 3% would be the biggest swing – and decrease for net exporters, such as barley (-1%).

On the other hand, if an FTA cannot be agreed on then the WTO default option could see Most Favoured Nation (MFN) tariffs imposed both ways on EU-UK trade with no change to tariffs or quotas with the rest of the world, and an estimated 8% of additional EU trade costs factored in. These tariffs would significantly benefit net importers with milk rising by around 30% and pork 18%. But sheep farmers would be hit with a 30% price drop. However with an increase in consumer prices predicted, this is unlikely to happen.

However, if the proponents of a liberalised trading system got their way and MFN tariffs were applied to UK exports to the EU – but the UK did not impose them on imports then the results would be nothing short of disastrous with cheaper, lower quality food coming in forcing prices down across the board.

This according to Alistair may be the Holy Grail for some politicians as cheap food and Mrs May’s claim that no deal is better than a bad deal is their aim, but this would be cataclysmic for the industry.

 

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.