On 22 February 2018 ACT Alliance convened Seminar on the Implications of Brexit in the agro-food sector for ACP countries and for the forthcoming ACP-EU Post-Cotonou negotiations. A series of twelve 2 page summary notes were produced for the seminar covering both substantive issues arising within the Brexit process and the current state of play in the Brexit process. Note 3 provided an exploration of the vulnerability of ACP Members to the process of transitioning the UK out of the EU in terms of the application of non-tariff measure sin the agro-food sector.
Looking Beyond Tariffs
The issue of the market consequences of Brexit reaches beyond the question of future post-Brexit UK tariffs on imports from ACP countries; there are also a host of non-tariff issues impacting on ACP exports to the UK which will also need to be addressed as part of the Brexit process. In the agro-food sector these mainly relate to with SPS, food safety, rules of origin and trade administration requirements.
As part of the Brexit process the UK government proposes to repeal the 1972 European Communities Act, which provides the legal basis for the transposition of EU regulations into UK law, with the intention being to pass enabling legislation to facilitate the transposition of existing EU legislation into UK law.
The Complexities of the Regulatory Transposition Process
In the agro-food sector EU regulations can be divided into two distinct legal instruments: EU Directives and EU Regulations.
EU Directives required domestic UK legislation in order to be applicable under UK law. Each of these Directives was thus subsequently accompanied by legislative measures which incorporated the requirements of the EU regulations into UK law. Nevertheless many of these 15,000 pieces of EU legislation may require adjustment in order to align them with the new post Brexit institutional and policy realities.
EU Regulations in contrast were ‘directly applicable’ in the UK and became part of UK law without any need for domestic legislation. As a consequence with the repeal of the 1972 European Communities Act new UK legislation will be required to fill the legal vacuum arising from the non-applicability of EU Regulations which were ‘directly applicable’ and hence have no independent foundations in UK law.
It has been estimated that there are some 5,000 pieces of EU legislation which were ‘directly applicable’ and which will hence require new UK legislation to be legally enforceable under UK law. Enabling legislation is being passed to facilitate this transition to a solid UK legal basis for EU Regulations.
An April 2017 review of the legal implications of Brexit for the agricultural sector by the firm of Mills & Reeve concluded the UK government will need to ‘sift through all inherited EU law to decide whether it should be retained, amended or repealed’. It notes how the UK will need ‘a flood of new legislation’, creating a situation where ‘the chances of it all being well thought through and skilfully drafted are not so great’.
Against this background Mills and Reeve warned UK agro-food sector stakeholders that they will need to ‘look out for things that have been missed’, with this warning being equally applicable to ACP agro-food exporters if they are to avoid unexpected obstacles to trade.
The Scope for UK and EU27 Regulatory Divergence
Beyond this legislative dimension a more fundamental issue arises, namely the extent to which the post-Brexit UK regulatory system will remain aligned with the EU SPS and food safety control regime.
This issue came to the fore in the first phase of the Brexit negotiations around the question of the Irish border, the EU’s only land border with the UK.
The EU takes the view that in order to retain a ‘soft’ border on the island of Ireland it will be necessary for agro-food sector regulations in the Republic of Ireland and Northern Ireland to remain aligned.
The initial phrasing of an EU/UK agreement on regulatory alignment was rejected by the Conservative Party’s parliamentary allies the Democratic Unionist Party (DUP), with the subsequent compromise being a classic piece of ambiguous and contradictory ‘euro-fudge’.
Specifically it announced the UK’s intention to achieve ‘full alignment’ ‘through the overall EU-UK relationship’, but allowed for ‘specific solutions to address the unique circumstances of the island of Ireland’ should it not be possible to address this issue as part of the UK/EU27 arrangement.
In this context the UK government committed itself to ‘maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all island economy and the protection of the 1998 Agreement’.
This commitment however sits uneasily with the following paragraph which states ‘in the absence of agreed solutions, as set out in the previous paragraph’; the UK ‘will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom’.
With regard to agro-food sector regulations this is a matter of some concern, with the Secretary of State for International Trade, Liam Fox publicly announcing his willingness to accept imports of chlorine washed chicken from the US if this was part of the price which had to be paid for a bilateral UK trade agreement with the USA.
This would be in contradiction to the ban the EU has had in place on imports of chlorine washed meat since 1997, with this being one of number of areas (hormone treated beef, GMO crops) where EU and US standards are substantially at variance.
The prospect of regulatory divergence in the agro-food sector as the UK seeks out new trade arrangements with non-EU partners could have a multiplicity of diverse effects on ACP agro-food exporters seeking to serve both the UK market and EU27 markets.
These issues will need to be assessed at the product level and mechanisms will need to be established to address the issues arising.