The Government has dropped plans to slash tariffs on imports of many agricultural products from the start of next year, following strong industry lobbying.
The move has been welcomed by industry bodies, including the UK farming unions, which have pointed out, however, that the Government will still have the capacity to cut tariffs in individual trade deals with other countries.
On Tuesday morning, the Government announced the UK’s new Most Favoured Nation (MFN) tariff regime, the UK Global Tariff, which will replace the EU’s Common External Tariff on January 1 2021, at the end of the Transition Period. These are the default tariffs that are offered to all countries, before any direct ‘free trade agreements’ are made with individual nations.
The regime scraps and simplifies a number of tariffs, for example on products like biscuits, pizzas and confectionary.
But it maintains tariffs many agricultural goods, at current EU levels,with adjustments made for currency. This has been done in a reversal of previous proposal to slash tariffs on agricultural goods to ‘support businesses in every region and nation of the UK to thrive’, the Government said.
In a joint statement, the four UK farming unions – NFU, NFU Cymru, NFU Scotland and Ulster Farmers’ Union – said: “We are pleased the government has listened and maintained many of the safeguards currently in place for UK farmers under its new UK Global Tariff schedule. This is particularly important in fulfilling the UK government’s commitment not to undermine our high food and farming standards.
“It is worth remembering, however, that these tariffs are likely to be negotiated away as part of any trade deals that will be struck in the coming months, and so those deals must include strong provisions ensuring food imports are produced to the same standards required of our own farmers. Not only will this help the government fulfil its vision of a sustainable and profitable UK farming sector but will also meet public demand that our standards are not undermined in future trade policy.
Although the overall position appears to support UK farmers, the unions stressed that they need to ‘examine and fully consider all the implications of the simplifications involved’.
“For instance, it is still likely that the changes will lead to increased competition for some domestically produced commodities and we will need to understand the precise nature and impact of that. We are also urging the government to provide clarity around its ability to adjust the tariffs announced today, in particular in the event that there is no negotiated agreement with the EU on a future relationship by the end of the year,” they added.
Scottish Association of Meat Wholesalers president Andy McGowan said: “This is a hugely welcome outcome and gratifying that our hard work in discussion with Government prior the new tariff regime being agreed has clearly paid off.”
The new regime is a relief for Scotland’s farming and processing sector with the tariffs for beef, lamb and pork remaining the same as current EU terms. Pigmeat, in particular, is much better served than in the original draft regime which proposed almost complete withdrawal of protection from this highly important part of the Scottish industry.”
NPA senior policy adviser Ed Barker said the announcement was ‘great news’ for the pig sector. “This is overwhelmingly better than the ‘no deal’ 3-5% tariffs published in 2019, which would have been devastating.
“The Government has clearly listened to the arguments we put forward and has announced a regime that will go a long way to protecting the pork sector against cheap imports.”
He pointed out, however, that the threat has not gone away as the Government can still slash tariffs as it strikes up new trade deals with the likes of the US.
As a member of the EU, the UK currently has tariffs in place of up to 45% on pork products. The NPA said it was deeply concerned last year when the Government proposed to slash tariffs on pork products to, typically, around 3-5%, which would have opened our doors to cheap imports from across the world.
Ian Wright, chief executive of the Food and Drink Federation, welcomed the announcement.
“The Government has taken on board FDF’s suggestions to maintain specific and compound tariffs on agrifood goods that limit exchange rate impacts on tariffs, and encourage the use of higher quality and value ingredients. This gives food and drink manufactures time to prepare for the application of these tariffs after 1 January 2021.
“This is a sensible step back from the temporary tariffs set out in March 2019. This approach will preserve essential negotiating capital for the UK in trade talks with the EU, US and Japan. That said, it is vital that the UK secures a trade deal with the EU before the end of the year to avoid serious damage to manufacturers and for consumers.”