Trade policy

The UK and Australia signed a preferential trade agreement on 17 December 2021 and this entered into force on Wednesday 31 May 2023.

UK government has published guidance on this agreement and trade with Australia.

We produced a document for FDF members that sets out key provisions in this agreement.

Overview of UK-Australia FTA

Canada is a major trading partner for many food and drink manufacturers. It is a valuable market for exports of high-quality value-added products worth £456.5 million in 2022, up 22.7% since 2021. It is also an important supplier of ingredients and raw materials that aren’t produced in sufficient volumes domestically and complement the use of domestically produced inputs. Imports from Canada were worth £758.6 million, up 28.5% in 2022.

The UK and Canada should aim to improve on the existing agreement, to better reflect the interests and needs of businesses on both sides. This presents an opportunity to customise the trade deal to the specific priorities, strengths and trading patterns of UK manufacturers. Through increased trade, our industry is uniquely placed to drive growth and job creation in all UK regions.

The existing agreement allows for extended cumulation of EU content and processing as part of the rules of origin for three years. This provision will expire on 31 March 2024 and in the absence of an extension or talks on a new FTA being concluded, some UK exporters will be unable to access preferential tariffs when exporting to Canada.

Following extensive engagement with our members, we have set out in this paper our priorities for a new UK-Canada trade agreement.

FDF priorities for trade with Canada

Latest updates

The UK formally signed an agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 16 July 2023, a preferential trade agreement with 11 countries in the Indo-Pacific region.

A process of Parliamentary scrutiny and legal ratification now follows, with the UK's accession requiring legal approval both in the UK but also in all 11 existing CPTPP Member States. It is hoped that the deal will enter into force in the second half of 2024.

FDF member guidance

We produced guidance for FDF members setting out an overview of key provisions in this agreement for food and drink manufacturers.

FDF overview of key points in CPTPP

The agreement will deliver new preferential access for trade with Malaysia and we produced a paper for FDF members highlighting opportunities for UK food and drink businesses.

New trade opportunities in Malaysia

Understanding the CPTPP rules of origin

CPTPP sets out a single approach to rules of origin for goods traded between its members. Where trading with a CPTPP member with which the UK has an existing FTA, businesses will have the option of trading under the terms of whichever agreement is most favourable.

It is important that businesses understand the points of difference, opportunities and challenges in the CPTPP rules of origin, which include:

• full cumulation of originating materials between CPTPP members
• the use of regional value content (RVC) requirements for some products
• exceptions to the 10% value tolerance provisions for some food and drink products; and
• more nuanced product specific rules that can vary significantly within chapters.

We produced guidance for FDF members on the rules of origin in this agreement.

FDF guidance on CPTPP rules of origin

The EU-UK Trade and Cooperation Agreement (TCA) is a free trade agreement between the UK and the European Union that was signed and published on 30 December 2020. The agreement entered into force on 1 January 2021.

We produced a paper for FDF members that sets out key points in this agreement for food and drink manufacturers.

FDF overview of key points in the TCA

If you trade with the EU and want to avoid payment of tariffs, you need to ensure your goods comply with the TCA's rules of origin. These are the detailed terms and conditions that goods must meet to demonstrate the product’s ‘economic origin’ to allow it to be traded tariff-free.

We produced guidance for FDF members to help them in navigating the TCA rules of origin when exporting to or importing from the EU.

FDF guidance on TCA rules of origin

The Gulf Cooperation Council (GCC) is an important trading partner for many food and drink manufacturers, primarily as an export market that offers significant potential to further grow sales of high-quality value-added products. Our exports were worth £870.1 million in 2022, up 39.3% since 2021. Imports from the GCC are comparatively low at £41.2 million. As a bloc, it is our sixth largest export destination and second largest non-EU market.

Saudi Arabia is the GCC’s biggest importer of food and drink but only the second largest GCC destination for UK exports after the UAE. Our priorities focus largely on securing new and improved market access for UK exporters via an expansive UK approach that delivers extensive tariff liberalisation and more harmonised and simplified approaches to labelling, certification and border requirements. This would remove barriers that currently impede UK exports and would unlock opportunities to drive future growth.

Following extensive engagement with our members, we have set out in this paper our priorities for a preferential trade agreement with the GCC.

FDF priorities for trade with the GCC

India is an important trading partner for many food and drink manufacturers. It is a valuable market for exports of high-quality value-added products worth £316 million in 2022, up 84.5% since 2021. India is also an important source of ingredients and raw materials that are not produced domestically with imports worth £787 million in 2022, up 17.8% since 2021.

A preferential trade agreement presents opportunities for UK producers but carries risks and will require a different approach to the FTAs with Australia and New Zealand. UK government should exercise caution due to challenges presented by India’s inconsistent application of production and labour standards and its use of trade distorting export subsidies. No outcome of negotiations should result in any weakening of protections for health, safety or the environment.

Following extensive engagement with our members, we have set out in this paper our priorities for a UK-India trade agreement.

FDF priorities for trade with India

Israel is an important trading partner for many food and drink manufacturers. While a trade agreement is currently in place between the UK and Israel, an updated deal could significantly boost our trade and benefit both parties. It is an important and growing market for exports of high-quality value-added products worth £140 million, up 33.7% from 2021. It is also a supplier of ingredients, raw materials and finished products worth £126.9 million.

Like the UK, Israel’s relatively small geographical size and limits on agricultural production preclude self-sufficiency in food and drink. A revised deal presents a good opportunity to better reflects the needs of both markets, delivering increased market access and facilitating growth in agrifood and drink trade in both directions.

Following extensive engagement with our members, we have set out in this paper our priorities for a new UK-Israel trade agreement.

FDF priorities for trade with Israel

The UK and Japan signed an updated preferential trade agreement on 23 October 2020 and this entered into force on 1 January 2021.

UK government has published a series of explainers on this agreement, including papers on:

• trade in agrifood and drink
• geographical indications
• rules of origin

We produced a document for FDF members that sets out key provisions in this agreement.

Overview of UK-Japan FTA

Mexico is an important trading partner for many food and drink manufacturers with exports of high-quality value-added products worth £168.5 million in 2022, up 18.7% since 2021. It is also a supplier of ingredients, raw materials and finished products with imports worth £133 million in 2022.

Significant opportunities exist to expand trade in both directions through a more comprehensive and ambitious preferential trade agreement. The existing deal with Mexico doesn’t deliver the ambitious outcomes seen in recent trade deals and excludes many food and drink products, with prohibitively high tariffs effectively blocking many UK exports. Outcomes should at least match the new EU-Mexico agreement, to ensure UK exporters can compete effectively with EU counterparts.

The existing agreement allows for extended cumulation of EU content and processing as part of the rules of origin for three years. This provision will expire on 1 June 2024 and in the absence of an extension or talks on a new FTA being concluded, some UK exporters will be unable to access preferential tariffs when exporting to Mexico.

Following extensive engagement with our members, we have set out in this paper our priorities for a new UK-Mexico trade agreement.

FDF priorities for trade with Mexico

The UK and New Zealand signed a preferential trade agreement on 28 February 2022 and this entered into force on Wednesday 31 May 2023.

UK government is has published sector-specific guidance on this agreement and trade with New Zealand.

We produced a document for FDF members that sets out key provisions in this agreement.

Overview of UK-New Zealand FTA

South Korea is an important trading partner for many food and drink manufacturers. It is a valuable market for exports of high-quality value-added products worth £254.0 million in 2022, up 38.7% since 2021. It is also a supplier of ingredients, raw materials and finished products with imports worth £89.4 million in 2022, up 29.6% from 2021.

The UK and South Korea should aim to update and replace the existing agreement to better reflect the interests and needs of businesses on both sides. This presents an opportunity to customise the trade deal to the specific priorities, strengths and trading patterns of UK manufacturers. Through increased trade, our industry is uniquely placed to drive growth and job creation in all UK regions.

The existing agreement allows for extended cumulation of EU content and processing as part of the rules of origin for three years. This provision will expire on 1 January 2024 and in the absence of an extension or talks on a new FTA being concluded, some UK exporters will be unable to access preferential tariffs when exporting to South Korea.

Following extensive engagement with our members, we have set out in this paper our priorities for a new UK-South Korea trade agreement.

FDF priorities for trade with South Korea

Switzerland is an important trading partner for many food and drink manufacturers. It is a valuable market for exports of high-quality value-added products worth £152.3 million in 2022, down 11.6% since 2021. It also supplies ingredients, raw materials and finished products worth £425.2 million in 2022.

The UK and Switzerland should aim to update and replace the existing agreement to better reflect the interests and needs of businesses on both sides. This presents an opportunity to customise the trade deal to the specific priorities, strengths and trading patterns of UK manufacturers. Through increased trade, our industry is uniquely placed to drive growth and job creation in all UK regions.

Following extensive engagement with our members, we have set out in this paper our priorities for a new UK-Switzerland trade agreement.

FDF priorities for trade with Switzerland

On 18 July 2023, the UK and Turkey issued a joint statement confirming plans to negotiate a new Free Trade Agreement to replace existing preferential trade arrangements.

The current UK-Turkey trade agreement, signed in December 2020, has provided continuity to businesses and helped safeguard supply chains following the UK’s departure from the European Union.

We are now engaging with members to identify priorities and opportunities in an updated deal ahead of an expected formal consultation from the Department for Business and Trade (DBT).

This paper for FDF members provides a comprehensive overview of the status of UK trade negotiations and concluded preferential trade agreements. It is regularly updated to reflect latest developments and key announcements from the Department for Business and Trade (DBT) and includes links to:

• official information on negotiations including legal texts and announcements; and
• FDF position papers, explainers and guidance.

FDF's preferential trade tracker

In May 2023, the EU passed a regulation to establish deforestation-free supply chains which will apply to a range of commodities when imported into the EU. 

The UK is developing its own policy, which aims to deliver the same outcomes but will place different requirements on businesses.

We hosted a session with EFECA at 13.00-14.00, 22 September 2023 where we discussed the UK and EU policies in more detail. Members can find the session slide deck below and additional information here.

We produced a paper for FDF members that outlines the EU regulation and UK proposal and summarises key points of difference.

UK and EU initiatives to tackle deforestation

EFECA slide deck

In March 2023, UK government published its strategy to enhance UK energy security, seize economic opportunities and deliver the UK’s net zero commitments ‘Powering Up Britain’.

They also launched a consultation on measures to mitigate against future carbon leakage, including the option of introducing a Carbon Border Adjustment Mechanism (CBAM).

Key documents that we have published for FDF members are:

FDF CBAM guidance

FDF response to CBAM consultation

European Commission guidance

The UK's new Developing Countries Trading Scheme (DCTS) entered into force at 00.01 on 19 June 2023, replacing the Generalised Scheme of Preferences (GSP).

This new scheme unilaterally provides preferential access into the UK market for imports originating from developing countries. With entry into force, the government published a selection of new guidance for businesses.

We produced guidance for FDF members that sets out the key provisions contained in the DCTS, focusing on:

• what this means for tariffs and rules of origin for imports from qualifying countries;
• the process by which products graduate out of the scheme to face the full UK Global Tariff as sectors in recipient countries become globally competitive; and
• revisions to the conditionality required by some countries to benefit from the provisions.

FDF guidance on DCTS

When the UK concludes a new or updated trade agreement, a complicated process then follows in Parliament to ratify the agremeent and enable its entry into force. This process varies depending on the scope of the deal and will take longer where new primary legislation is required.

We produced guidance for FDF members that details the required steps and includes examples of what will be required to finalise the UK's new FTAs with Australia and New Zealand to enable implementation in 2023.

FTA ratification process

The Department for Business and Trade (DBT) has a report a trade barrier service which is a useful way to ensure all key parts of the government are aware of barriers affecting your exports.

We recommend that UK manufacturers use this service wherever you encounter barriers to trade that delay, block or add unnecessary costs to exports.

Any issues reported are shared with officials in relevant government departments, including DBT and Defra, and to UK embassies. Where possible, they will seek to resolve these issues and it can also shape UK priorities in trade negotiations.

We produced a short paper for FDF members on the information you need to provide when reporting a trade barrier.

FDF guidance on reporting trade barriers

In 2018, we published a report with Global Counsel to help UK government and businesses understand the importance of rules of origin for the UK food and drink sector in the context of trade negotiations with the EU and it sets out practical solutions that can deliver the best outcomes for UK food and drink. Our report explains:

1. how origin requirements work and why they can pose a particular challenge for our sector; and
2. how various approaches to origin requirements can impact supply and distribution models in a series of case studies.

The ideas and solutions set out in our report can be used in any UK trade deal to deliver the simplest and most generous outcomes that will benefit trade and support export growth in UK food and drink.

FDF's report on rules of origin