Frictionless trade is the ideal

The document agreed between negotiators in London and Brussels as a basis for the EU heads of state summit promises much for agriculture, but offers no firm commitments on trade.

There is a general commitment that both sides will seek a trade relationship that is “as close as possible” after the post-Brexit transition period and there is talk of free and frictionless trade – but no firm plan about how this would be delivered.

The document suggests both sides aligning key rules on food standards, but also confirms that the UK will no longer be in the single market.

Without common rules it is hard to see how trade could be frictionless, despite a commitment that there will be no tariffs, agricultural or otherwise, and “deep regulatory cooperation”.

This underlines that the document is an agenda for further negotiations on trade, rather than a final agreement.

The document would create a unique position for the UK, as the only developed country to have an EU trade deal based on zero tariffs.

In agriculture it is difficult to see how that could be delivered without a common rule book.

Agricultural output in the EU rose by 6% in 2017, according to figures from the European Commission.

The increase to 433 billion euros was mainly down to better livestock and milk prices, compared to 2016.

The report says 56% of the value of agricultural output was spent on what it describes as intermediate consumption – goods and services used in agriculture.

Gross value added – the difference between the output and these costs – was then 44% or 189 billion euros, which went to meet labour costs, farm family incomes and other costs such as depreciation and capital investment.

A rise in the value of output while costs were kept down saw the gross value added figure increase by 12.4% last year.

The European Commission has agreed a strategy to boost production of protein crops in the EU.

Europe is currently at a self reliance figure of 79% for rapeseed but just 5% for soya, with imports coming mainly from the United States and Brazil.

This report reflects a commitment to boost domestic production of protein for livestock feeds, partly because it is becoming more costly and more difficult to secure non-GM soya sources.

The EU imports 13 million tonnes of soya a year and the plan is to boost production in the long term. Strategies include financial incentives through the CAP for legume crops on environmental grounds, a doubling of the current research budget and better market analysis.

The commission is also calling for more information sharing and it will help fund promotions around the use of locally-grown proteins.

No firm commitments on trade have been given in the document agreed between negotiators in London and Brussels.