The Courier & Advertiser (Perth and Perthshire Edition)
Free-trade deals are on agenda in Brussels
Brussels is coming back to life after the August break, with two key trade issues on the agenda for the Agriculture Committee of the European Parliament. These are around possible freetrade deals with Australia and New Zealand, which the European Commission wants to press ahead with as quickly as possible.
Free-trade deals have been given a new impetus by European Commission president Jean-Claude Juncker, who sees them as key drivers for economic growth in Europe.
There also appears to be a private agenda to lock up as many of these as possible before the UK can begin negotiating post-Brexit trade deals with third countries.
On Australia and New Zealand, reports for MEPs warn that while there are opportunities there are also big threats to European agriculture because of the low-cost production and export focus of the farming industries in both countries.
Post-Brexit trade options
A report by researchers in Northern Ireland has looked at the implications for farmers of the three main postBrexit trade options.
The research was carried out, using a joint UK/US economic modelling programme, by the Agrifood and Biosciences Institute.
The three options were: a special deal with the EU while remaining outside the customs union; trading on the basis of World Trade Organisation tariffs; and the radical option of the UK setting zero tariffs for imports, in the hope others would allow it to trade on a similar basis.
This unilateral option would cause most damage and is unlikely to be considered.
The easy option of a special trade deal with the EU would add inspection and other costs to ensure products meet EU-27 standards.
This would reduce farm returns by a modest figure below 3%.
Ironically the WTO option would cause least damage for farmers, other than sheep producers, because it would reduce imports and drive up UK food and farm prices.
However, while that might look attractive to farmers it comes with a huge warning that this outcome depends on the government backing a policy that would drive up prices on supermarket shelves.
Copa seeks supply chain legislation
The main organisation that represents EU farm unions, Copa, has told the European Commission it wants legislation to bring more fairness to the food supply chain.
Copa was responding to a consultation by the commission which will be the foundation for proposals later in the year to tackle unfair trade practices.
Copa says the ‘huge imbalance’ of power along the food chain left it with no option other than to seek legislation.
It does not believe any voluntary plan would deliver a successful outcome for farmers.
However, an existing voluntary approach has not been helped by Copa refusing to take part.
The Copa view contrasts with that of the English NFU, which wants a light-touch regime and minimal, if any, legislation.