Continued tariff-free market access - PAGE HIDDEN

For both UK food and drink exports and for vital imports of raw materials

The overwhelming majority of UK trade in food and non-alcoholic drink is with the EU – more than 70% of both exports and imports.

94% of exports and 97% of imports of food and non-alcoholic drink are with the EU or with countries that the EU has signed or is negotiating a trade agreement.

We have seen 15 years of consecutive growth for exports of value-added food and nonalcoholic drink, boosted by improved market access secured via EU Free Trade Agreements (FTAs).

Our members are committed customers of UK farmers, however they also need to import ingredients that are not produced in the UK or not produced in sufficient quantity to supplement their use of UK ingredients.

To meet consumer demand for food, our industry must have access to sufficient supplies of raw materials that are safe, of high quality and competitively priced.

FDF recommendations:

1. Tariff-free customs union with the EU

The EU is the UK's largest market for exports of food and non-alcoholic drink. Many manufacturers will struggle to substitute EU customers for ones in other parts of the world, including emerging markets, because of differing consumer tastes and limited product shelf-lives. Government must therefore prioritise tariff-free market access via a comprehensive UK-EU trade deal before proceeding with the Article 50 exit negotiation process. As a matter of urgency, Government must address the lack of capacity and capability for conducting trade negotiations. UK Government also needs to begin discussions with the Government of the Republic of Ireland on the long-term future of cross border trade. Changes to shopping and trading patterns engendered by currency fluctuations in the days following the referendum demonstrate that this is an urgent matter.

2. Access to tariff-free raw material imports

The EU is our largest market for imports of ingredients that are not produced in the UK or not produced in sufficient quantity. The loss of tariff-free access to imports from the EU would pose a grave threat as many manufacturers would struggle to secure alternative sources. Government must also prioritise continued tariff-free market access for imports via a comprehensive UK-EU trade deal before proceeding with Article 50.

3. Access to EU Free Trade Agreements (FTAs)

The UK benefits from 53 FTAs that the EU has secured and should continue to benefit from these deals. EU preferential trade agreements allow our sector to better compete in these export markets and provide improved access to key imports of ingredients. The conditions agreed in these FTAs should continue to apply without renegotiation.

4. UK market access and public sector procurement

The potential for a Scottish referendum increases uncertainty and many food and drink manufacturers are concerned that this could in time impact on market access within the UK. Further concerns arise around the risk of changes to UK public procurement policy, where the focus should remain on ensuring best value given the huge financial pressure faced by the public sector.