1. Brexit and the EU food and drink industry Lorenzo Ferrucci, FoodDrinkEurope
SD WG meeting, 30 January 2018
@FoodDrinkEU

2. Snapshot of key data
EU27-UK food and drink trade (2016, % of total exports/imports)
Source: Eurostat
The UK deeply relies on the EU27 both as an export destination and sourcing market.
23/11/2017

3. Snapshot of key data
Source: Eurostat
Top EU27-UK food and drink exports and imports (2016, € million)
Exports
Imports
Trade Balance
Wine
2,415
276
2,140
Bread, pastry and biscuits
2,028
740
1,289
Chocolate
1,804
558
1,246
Cheese
1,620
413
1,207
Offal, poultry meat
1,410
328
1,081
Animal feed, petfoods
1,325
773
552
Bovine meat fresh, chilled and frozen
1,252
392
860
Prepared and preserved meat
1,223
281
941
Food preparations
1,148
612
536
Pork meat fresh, chilled and frozen
1,038
184
854
Mineral waters and soft drinks
986
373
614
Fat, meat smoked
734 68
666
Prepared and preserved vegetables
716 60
657
Fruit juices
691
146
544
Spirits
602
1,967
-1,365
Wine is the EU27 most prominent product exported to the UK, while spirits dominate the EU27 imports from the UK.
23/11/2017

4. Brexit is a reality, so what now?
Article 50 process triggered on 29 March 2017
Three negotiation stages:
‘Divorce’ settlement
Transitional arrangement
Deal on the long-term EU27-UK relationship
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5. Treat food and drink as a priority sector
Our ‘asks’
Treat food and drink as a priority sector
Collaborate closely with industry
Involve industry in shaping transition
Agree clear roadmap and realistic transition arrangements rapidly
Minimal regulatory divergence
23/11/2017

6. Worst case scenario: WTO’s Most Favoured Nation
Small study on the direct effects of ‘hard’ Brexit
WTO duties, 10 sample products
Calculated the impact of duties on sales prices of products
Applied European Commission ‘trade price elasticities’ to estimate impact on volumes
Source: FTI, Eurostat
23/11/2017

7. WTO MFN TARIFFS COULD INCREASE EU FOOD AND DRINK EXPORT PRICES SIGNIFICANTLY, RESULTING INTO ↓ EXPORT REVENUES, NEGATIVELY IMPACTING EMPLOYMENT
Source: FTI calculations.
Notes: (1) calculations are based on approximations of the WTO MFN tariffs, (2) these approximations understate the tariffs on bread and chocolate , and so the price increase for these products may be greater than shown above, (3) all calculations assume the tariff is passed on in full.

8. Brexit and EU Regulation
Common Agricultural Policy (CAP)
EU quality certification schemes (PDO, PGI, organic, etc.)
General Food Law, incl. secondary legislation
Official food and feed controls
RASFF
EFSA
Applications (e.g. novel foods, health claims, food improvement agents)
Consumer information
Customs issues (tariff and NTBs)
23/11/2017

9. Brexit and EU Regulation
‘Soft’ policy (/mixed competence)
Nutrition and public health policy
Audio-visual Media Services Directive (AVMSD)
Unfair Commercial Practices (UCP) Directive
‘Emerging’ EU policy/regulatory fields
Sustainability (food waste, packaging, animal welfare)
23/11/2017

10. Customs issues Modernised Customs Code Tariff and Tariff Quotas
Rules of Origin
Customs procedures (e.g. additional documentation, controls)
Fighting fraud and counterfeit goods
Dialogue needed! (e.g. regulatory convergence dialogue, mutual recognition agreements, dispute settlement mechanisms, co-operation and information exchange between customs, etc.)
23/11/2017

11. What next?
Virtually all UK food law comes from the EU (and virtually all EU food law has EEA relevance)
For the UK, EU legislation stands until revoked, following completion of the separation process initiated by Article 50
What about EU laws currently being developed (post Art. 50 triggering)?
23/11/2017

12. Fact
Regardless of the UK standards post-Brexit, any UK food exporter wishing to trade with the EU under a free trade agreement has to comply with any EU food law relating to product standards
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13. In summary A strong and stable EU is in the interest of all
Any future EU27-UK trade agreement must ensure minimal trade disruption by:
Maximum collaboration on SPS measures and technical standards
Minimal divergence in application of such standards
Importance of strengthening and deepening EU Single Market and ambitious international trade agenda
23/11/2017

14. FoodDrinkEurope activities
Set up working group
Met with TF50
Done study
Work with food chain operators (Copa-Cogeca & Eurocommerce)
Work with EFFAT
Following developments in Brussels very closely
Study on customs to be commissioned (deadline end of March)
23/11/2017

15. You can’t have your cake and eat it Major progress on the TRQs
It takes two to tango
Brexit is Brexit
Brussels bubble
Buying time
Turn a blind eye
We need another word for Brexit
23/11/2017

16. 23/11/2017

17. A suivre ….
@FoodDrinkEU