This submission is made by the Food and Drink Federation (FDF), the trade association for food and drink manufacturing. Food and drink is the largest manufacturing sector in the UK accounting for almost 20 per cent of the total manufacturing sector, turning over more than £105 billion per annum; resulting in Gross Value Added (GVA) over £28 billion and employing more than 430,000 people. Our industry is larger than automotive and aerospace combined in terms of employment, GVA and turnover.
This submission is made on behalf of FDF’s membership and the food and drink industry. It does not preclude the individual responses of our members and of sector associations that provide responses with a focus on specific commodity codes and sectoral requirements.
The FDF is a longstanding advocate for trade liberalisation. We supported the WTO Doha Development Agenda (DDA) that aimed to deliver further trade liberalisation and put in place a fairer and clearer set of multilateral trading rules. Following the failure of DDA talks in 2008, FDF backed UK-driven plans for the EU to prioritise ambitious bilateral trade agreements. Given the scale of technical, regulatory and tariff barriers faced globally in agri-food and drink, preferential trade deals can deliver substantial benefits for our industry. However, tariff liberalisation should be undertaken on a multilateral basis – taking unilateral action risks disadvantaging UK-based producers.
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FDF summary response
Our industry’s top priority is to ensure that existing tariff-free trade in agri-food and drink remains tariff free after 31 December 2020. This is especially true for trade with the EU which is by an overwhelming margin our largest market and supplier. We welcome Government’s indication that this is a priority outcome in trade talks with the EU.
We recognise that the UK requires sufficient negotiating capital for future trade talks with the EU and others and agree that for this reason it is sensible to move away from the March 2019 temporary tariffs which undermined the UK’s ability to secure simple continuity trade deals, including a planned agreement with Canada.
Given these circumstances, a pragmatic approach would be to replicate the EU’s Most Favour Nation (MFN) applied tariff rates in the short-term and undertake a comprehensive review process to update both the UK’s applied and bound tariff rates. This would provide sufficient time after trade deals have been finalised with the EU, the United States, Japan, Australia and New Zealand for Government to work with industry to address the issue of specific tariff rates that are currently set in Euros.
However, we recognise that Government’s new applied tariff proposals could provide useful opportunities by broadly pursuing a pragmatic approach while making improvements that could benefit comparatively small volumes of imports into the UK that are currently subject to full MFN import tariffs, while providing a clear signal to WTO members about the UK’s long-term trade policy intentions.
On this basis, we support the intention of Government’s proposals, but there are areas which will require modification to avoid damaging price implications for producers, consumers and shoppers. Our support is predicated on Government ensuring tariff and quota free trade continues with the EU and other preferential trade partners after 31 December 2020, underpinned by generous rules of origin.
The FDF remains willing to assist the Government further in the process of setting the UK’s applied MFN tariffs, and in wider international trade policy activities, including the UK’s negotiations to secure preferential trade agreements with third countries that deliver new market access opportunities benefitting the UK’s largest manufacturing industry.