Early positives of the deal include the outline of an SPS (sanitary and phytosanitary) agreement which will reduce barriers for UK farmers and growers to export to the EU.
While the UK and EU both adhere to similar, high food production standards, both sides have agreed there should be limited exceptions to dynamic alignment but it is yet to be confirmed what this will cover.
Dynamic alignment essentially means there will be a single rule book on the agreed areas of law that are within the scope of the agreement.
The UK has agreed to dynamically align on sanitary, phytosanitary, food safety, general consumer protection rules applicable to the production, distribution and consumption of agri-food products, the regulation of live animals and pesticides, the rules on organics as well as marketing standards applicable to certain sectors or products.
A common understanding document sets out the terms of the negotiations between the UK and EU, allowing for a short list of limited exceptions to this alignment under certain scenarios.
Scrutinising the detail
Responding to the news, NFU President Tom Bradshaw said the government's ambition to make it easier for the sector to trade with the EU is welcome, but cautioned that "the detail is king". The NFU will be scrutinising the specifics of this deal as they become available in the coming weeks, and as talks between the UK Government and the EU continue.
Over the past five years, UK agri-food exports to the EU have stagnated with double digit reductions in exports volumes across a variety of farming sectors.
This deal has the potential to deliver a more mutually beneficial trading environment for UK farmers and growers. For example, once the details are finalised, we expect UK growers will again be able to export seed potatoes to the continent and enable smoother trade for sectors such as horticulture and crops which rely on imports of seeds and young plants.
“We know today’s announcement is only the start of further negotiations, and we ask our government to ensure any agreements made enable a thriving future for British farming and underpin our nation’s food security.”
NFU President Tom Bradshaw
What has been agreed?
SPS rules cover food safety and animal and plant health standards to ensure that food is safe for consumers and to prevent the spread of pests or diseases.
The UK and EU have announced their mutual agreement to negotiate an SPS agreement under certain parameters. Today is the start of the formal negotiations.
The agreement facilitates trade by reducing or eliminating the need for documentary, identity and physical checks, the necessary paperwork (eg, export health certificates, phytosanitary certificates) and the associated costs.
The UK will make a financial contribution in return for having access to decision making committees, databases and data, but it won’t have the right to vote as any other Member State. The agreement will apply to Great Britain, with Northern Ireland subject to the provisions in the protocol on Ireland/Northern Ireland. If there is a disagreement over the rules within the scope of the agreement, the EU Court of Justice will have the final say.
The EU and UK have also agreed to work towards linking ETS (Emission Trading Systems) through dynamic alignment in order to benefit from mutual exemptions from the respective EU and UK CBAMs (Carbon Border Adjustment Mechanism). Currently, the Carbon Border Adjustment Mechanism doesn’t cover agricultural products but has fertilisers in scope. The overall impact of alignment on the price of fertiliser is hard to gauge. The agriculture sector might benefit from consequent opportunities in the low carbon economy.
Important questions remain
The NFU has long been lobbying for an enhanced SPS agreement with the EU covering the fullest range of agri-food products, offering improved terms of trade, and eliminating/reducing unnecessary checks and paperwork.
NFU President Tom Bradshaw added: “We have always sought a strong trading relationship with the EU which reduces friction at a time of global instability. But, since 2020, farming and growing businesses have been faced with significant costs, burdensome paperwork and additional checks in order to trade with partners on the continent.
“The government has clearly listened to these concerns. With the scope to remove Export Health Certificates and cumbersome controls at the border, this deal will deliver many benefits for agri-food exports to the EU.
“However, there remain important questions about what is within the scope of this agreement and, where current rules and regulations do differ, if there will be any exclusions. As negotiations in this area continue, it’s vital that our government safeguards the progress we have made in policy areas such as precision breeding to enable the farming sector to continue to move forward in sustainable, resilient and innovative food production.”
The NFU is calling for the Precision Breeding Bill to be top of the government's agenda. It is a Bill which the NFU campaigned hard for, and this exciting policy area, that is also being considered by the EU, will help farmers improve resilience to climate change, enhance productivity and deliver nutritious food. The NFU is urging the government to protect the UK’s ability to make crucial regulatory decisions in this area, alongside others, and foster continued innovation and research.
“We have always argued that trade with the EU must be based on equivalency,” Tom continued. “Despite the benefits this deal brings, full dynamic alignment comes at a significant cost of committing to future EU rules, in which the UK will have little say.
“We know today’s announcement is only the start of further negotiations, and we ask our government to ensure any agreements made enable a thriving future for British farming and underpin our nation’s food security.”
How did we get here?
Since 1 January 2021, the EU has applied third-country customs and border controls to UK agri-food exports, including documentary and physical checks. UK exporters of POAO (products of animal origin), including meat and dairy, now require vets to inspect individual export consignments and sign Export Health Certificates.
This has impacted the flow of goods and incurred costs with exporters paying veterinarians up to £185 per consignment, and consequently UK products are now less cost-competitive in Europe.
Compliance with new export requirements also requires additional expertise in exporting or the outsourcing of such services which is an extra cost to the business. UK exports of live animals have also stopped due to the absence of key infrastructure for checks in the EU.
UK exports of seed potatoes have also been banned since Brexit, causing jeopardy in the UK and EU markets. The EU also operates a list of prohibited and restricted goods, including chilled minced meat and chilled meat preparations (such as sausages).
For horticulture businesses, there remain many concerns with the implementation of the latest phase of border controls, most acutely that the shift of controls away from their businesses to BCPs (Border Control Points) adds an additional level of risk and cost to a highly bio-secure, ‘just-in-time’ supply chain.
The BCPs are seen by the industry as a point of infection risk, rather than inspection. We recognise that much has been done to seek to address the concerns of growers, but our view is that much more needs to be done by the government to demonstrate that grower’s concerns are being taken seriously, and to rapidly develop genuinely practical, pragmatic policy solutions that ensure operational staff at APHA can best support the industry.
The EU represents a key market for agri-food trade, with 68% of the UK's total exports destined for the EU in 2024 and EU goods representing just over 70% of all imports to the UK.
How does the UK-EU trade agreement affect my sector?
Our expert trade team has produced sector factsheets to highlight the changes in the SPS regulatory space since the end of the transition period. The UK is now considered a third country by the EU since it left the single market. Therefore, despite many rules still being the same, there is now a need for export certificates, documentary and physical checks.
Looking at the SPS rules, the factsheets present areas of friction and instances where we have seen some benefits from not being aligned with the EU’s rules. Based on the issues raised, the NFU’s trade team has presented possible solutions that aim to achieve a smooth and frictionless trading relationship.
