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The Future of UK Food Trade After The Post-Brexit TCA

I'm an accredited journalist working at the intersections of science, food and public health. I am also a certified nutritionist.

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TCA Challenges

Since the UK has left the EU, there has been an extended transition period for food products sold from and to the British market. With the phased implementation of the TCA and delays created by the health crisis, the divorce process will take more years to complete.

Now is the prime time for food companies to put forward their interests, stay up to date on regulatory developments and engage with EU and UK policymakers, seeking their opinion and expertise.

This blog on trading relations in the post-Brexit period provides some perspective by exploring potential challenges and restrictions across distribution, manufacturing and globalized research and development (R&D) operations.

The TCA was signed on 30 December 2020 with several stages of ratification. This agreement is unprecedented in terms of its breadth, covering anything from fisheries to police cooperation, compared to most other trade agreements in the European Union.

The trading cooperation agreement is legally distinct from the withdrawal agreement, even if there is a cross-reference between the two on areas related to good faith. These two agreements together form the basis of future relations between the EU and the UK.

The lack of depth of the TCA follows classical agreements with third countries relative to trade transport and results from the multiple red lines that the UK has drawn during negotiation.

These red lines included ending free movement, exiting the single market (SM), Customs Union (CU) and Court of Justice of the European Union (CJEU), while the EU has not permitted differential agreements.

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The main challenge affecting the TCA implementation is fisheries, which are economically small but politically extremely sensitive. On other issues where no agreement has been found due to these red lines, little has changed since 2020. And it has not been recognized that additional agreements should be appended to address them.

TCA “add-ons” will emerge in the next few years in areas like financial services, phytosanitary rules, access to certain service sectors or free movement for particular types of workers.

Looking ahead, 2022 was set to be the year of divergence between the EU and the UK with the implementation of level playing field provisions of the TCA, including provisions on data protection and adequacy decisions to maintain the free flow of data to UK businesses.

Uncertainties remain about where the EU-UK relationship is heading in the medium term, five to ten years from now, and what needs to improve to help small export businesses.

The central trade-off between market access and regulatory alignment will persist. The EU is unlikely to give the UK market access with regulatory autonomy or without more regulatory alignment.

Trade Flow Changes

Although the SM condition and real economic cost of Brexit is wrapped up in the economic cost of the pandemic, figures from trade associations hint at the negative impact of the TCA on the UK’s food businesses.

According to the Food and Drink Federation (FDF), the UK closed out the fourth business quarter of 2021, registering a significant and persistent drop in food and drink exports to the European Union.

Produce exports to European countries in the first quarter of 2021 were down 46.6% from 2020 and down £2.7bn in the first three quarters of 2021 compared to pre-pandemic levels. The drop in sales to the EU was especially steep in Germany, Italy and Spain.

On the EU import side, sales from the EU decreased by 11% or a fall of more than £2.5bn throughout the first three quarters of 2021 compared to 2020. This was particularly evident for imports from the Netherlands and Germany.

Significant business has also been lost as a direct result of customs delays and costs of trading with the EU, including stockpiling costs to assuage concerns over food shortages last year.

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The increase in raw material pricing, cross-border trade costs, currency volatility and product pricing, and regulatory updates will require continued focus by internal teams to assess and monitor impacts on a food firm’s performance.

The UK Trade and Business Commission is learning from the food industry’s experience. First, the key issue to address the current challenges is alignment in food standards, which should be a priority and driving all else. Secondly, businesses have asked for simplified and automated export processes.

The EU and the UK are currently in talks over the issue of food standards. Brussels is urging Britain to remain aligned to EU standards, while the British government is asking instead for recognition of the UK standards as equivalent to EU’s.

New Brexit Guidelines

Customs rules changes for goods imports and exports have been gradually introduced since the initiation of the TCA.

On the 1st of January 2021, the EU introduced import controls for UK goods and simplified transitional arrangements for import declarations. Goods leaving the UK towards the EU must be accompanied by safety and security declarations known as EXS summaries.

There are additional considerations for animal origin product import from the EU and European Economic Area (EEA). The arrival of these products on UK soil must be pre-notified on the import of products, animals, food and feed system (IPAFFS) through the Department for Environment, Food, and Rural Affairs (DEFRA).

As of 1 January 2022, full customs declarations and controls mean that ports cannot release goods until they are cleared to do so. There are two models at the border: temporary storage for up to 90 days before being presented to customs or pre-declaration through the Goods Vehicle Movement System (GVMS).

As per the UK Border Operating Model (BOM) plan, new requirements for export health certificates which were due to be introduced on 1 October 2021 have been introduced on 1 July 2022.

Similarly, phytosanitary certificates and physical checks on plant origin sanitary and phytosanitary (SPS) goods due to be introduced on 1 January 2022 came into effect last July, along with other safety and security declarations on imports.

Full border controls were also delayed from 14 September 2021 until 1 July 2022. Again, the delays were tied to the pandemic's effect on traders' and shippers' preparedness.

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Manufacturing and Labelling

European legislation on the environment, consumer safety, food quality and human rights has contributed to better UK overall health and wellbeing. With Brexit, the UK lost some benefits of cooperation and information sharing with other EU member states, including enforcement initiatives such as uniform product safety laws and various health policies.

The UK has ceased being part of the European Food Safety Authority (EFSA) and other EU food safety bodies. EFSA is keeping current UK scientific experts in its ranks, but they do not act as delegates from the UK.

EFSA was behind implementing the 2019 Transparency Regulations around food chain risk assessments and communication, among other initiatives. The UK’s departure from EFSA will impact food chain compliance between the UK and the EU.

This means that it will be important for UK food manufacturers to maintain the integrity of their products and raw ingredients information that travels with them using appropriate inspection technology.

Up until the EU landmark referendum vote, the UK’s food and drink labelling standards were regulated by the EU food law system. While most of these laws are conserved, some subtle label adjustments have been introduced.

From 1 October 2022, food from GB must not be labelled as ‘origin EU’ Products with mixed origin should be labelled as “a mix of UK and non-UK origin.”

Until 30 September 2022, businesses can continue to use an EU, GB or NI food business operator (FBO) address on pre-packaged food or caseins sold in GB and include a UK address for the FBO thereafter.

Since 1 January 2021, new logos must be affixed on products produced in the UK and sold in the EU and/or NI. For GB goods sold in the GB market, businesses have until 30 September 2022 to make these changes.

Since March 2022, any products for sale in the UK should display relevant geographical indication (GI) logos. The EU emblem cannot be used on any goods produced in the UK without authorization from the EU.

The EU organic logo cannot be used on any UK organic food or feed unless the EU recognises the UK control body certifying it as fit for the EU market. If there isn’t equivalency with the EU, that food or feed cannot be exported to the EU.

Products of animal origin exported from the UK to the EU must carry the correct health and identification marks and bear the new UK health mark instead of the current EU oval mark.

The Rowett Institute at the University of Aberdeen is one of Europe's best nutrition research centres.

The Rowett Institute at the University of Aberdeen is one of Europe's best nutrition research centres.

Food Product Development

In some respect, a non-EU member status benefits the UK’s food industry. Some EU rules tightly regulate the use of novel non-nutritive sweeteners, as well as sugar-reduction and botanical claims. These limitations reduced the incentive for manufacturers to formulate healthier products.

On the other side of the coin, health food product development that hits the mark is informed by innovative, collaborative and high-quality research. Leaving the EU means less cooperation between nutrition researchers all over Europe and harmonization within the EU.

Nutrition science relies upon large industry-led research projects, which is only possible with pan-European cooperation and the backing of major dietary supplement, food or nutraceutical manufacturers.

Many UK research institutes have participated in big EU-funded food science projects like Horizon 2020 or EPIC. Other nutrition research projects that benefited from EU funding included the University of Aberdeen Full4Health, on food-gut-brain mechanisms and the University of Liverpool’s SATIN project on hunger and satiety regulation.

Supporting industry-led research and innovation is essential for food product businesses to stay ahead of the game and capture new markets, especially as precision nutrition continues to trend.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2022 Camille Bienvenu

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