NFU Brexit Update – August 2018

Whitehall officials have been keen to get desks clear ahead of summer holidays, generating a frenzy of activity, writes Tori Morgan. The fallout from the Chequers meeting at the end of June continued with the resignation of prominent Brexiteer and Foreign Secretary Boris Johnson who brandished May’s plan as a ‘miserable, permanent limbo’ and Brexit Secretary David Davies. Theresa May swiftly replaced David Davies with Dominic Raab, but appeared to almost immediately clip the wings of the Department of Exiting the EU and it’s new Secretary of State, by taking over responsibility for the Brexit negotiations and strategy herself.

Despite numerous amendments to the Customs and Trade Bills seeking to squash her Chequers plan, the Prime Minister once again narrowly survived crucial votes in Parliament albeit with a fractured party. Parliament is now in recess but Brexit and the prospect of no deal continues to make headlines with Trade Secretary Liam Fox putting odds on at 60:40. How much of this is simple negotiating bravado remains to be seen. But there is no doubt the work inside government on “no deal” planning is certainly accelerating. 20 of the 70 forthcoming government notices setting out what will happen in a “no-deal scenario” relate to the agri-food sector and government is presently recruiting 1000 more Border Force staff to police our border.

Key Developments – View from the UK

UK Government sets out its position for the future relationship with the EU

In July the government released two Brexit White Papers. The first White Paper builds on Theresa May’s Chequers statement, it sets out detailed plans for negotiating the UK’s future relationship with the EU. It explains how that relationship would work, what benefits it would deliver for both sides, and why it would respect the sovereignty of the UK as well as the autonomy of the EU. The government proposes to establish a new a free trade area for goods including agrifood, this agreement would be underpinned by a common rulebook which would cover only those rules necessary to provide for frictionless trade at the border. The government also sets out plans for a “facilitated customs arrangement” that would see the UK collecting duties on behalf of the EU for goods ultimately destined for the EU market and offering reimbursements for imported goods that remained on the domestic market. The NFU Brexit team have prepared a summary of the paper which is available here.

The second Brexit White Paper published in July sets out how the government plans to legislate for the outcome of the “Article 50” Withdrawal Agreement negotiations. It will do this using the EU (Withdrawal Agreement) Bill which will be introduced in Parliament once negotiations have concluded between the UK and EU and only once Parliament has approved the terms of the final deal - in other words following a meaningful vote in Parliament. The EU (Withdrawal Agreement) Bill must pass before the UK leaves the EU on the 29th March 2019 in order for the Withdrawal Agreement to have domestic legal effect. Read the NFU briefing here.

UK appoints new Brexit Secretary – Dominic Raab

Following the resignation of David Davis from the Cabinet, Theresa May has appointed Dominic Raab as Secretary of State for Exiting the European Union. Raab is MP for Esher and

The voice of British farming

Although every effort has been made to ensure accuracy, neither the NFU nor the author can accept liability for errors and or omissions. © NFU

Walton and was previously the Minister of State for Housing. He studied law at Lady Margaret Hall, Oxford and has spent time in Brussels advising on EU and WTO law. However within weeks of his appointment, Theresa May made a written statement to the House announcing that she “will lead the negotiations with the EU” with Dominic Raab “deputising” for her. The statement goes on to say that the Cabinet Office Europe Unit, led by adviser Olly Robbins, will have “overall responsibility for the preparation and conduct of the negotiations.” Whilst the Department for Exiting the EU will “continue to lead on all of the government’s preparations for Brexit,” including domestic preparations for all eventualities and all relevant legislation.

Brexit Secretary – “government will make sure there is adequate food supply”

Dominic Raab faced a grilling when he appeared in front of the House of Common’s “Exiting the EU” Committee. Committee Chair Hilary Benn explored the government’s preparedness for a no deal outcome asking a series of questions including whether it is stockpiling food. In response Mr Raab said that the government would be setting out its position in a series of technical notices (due at the end of August), but that “it would be wrong to describe it as the government doing the stockpiling. He said that “the idea that we only get food imports into this country from one continent is not appropriate” and the government “would make sure that there is adequate food supply.” He declined to comment further on what action the government will take to deliver this. Meanwhile the British Retail Consortium (BRC) fired back saying that “stockpiling of food is not a practical response to a no-deal on Brexit and industry has not been approached by government to begin planning for this. Retailers do not have the facilities to house stockpiled goods and in the case of fresh produce, it is simply not possible to do so.”

The Customs and Trade Bills pass through Commons

Both the Trade Bill and the Customs Bill were debated and voted upon in the Commons shortly before Parliament broke up for recess. These bills are important as they allow the UK to continue trading internationally after Brexit and give the government the power to put in place tariffs, establish trade remedies and to implement trade agreements around the world. However, the debates were heavily politicised and concessions in the form of amendments to the Customs Bill in particular had to be made to appease Tory rebels. Amongst the amendments adopted by the Commons is one which would prevent the UK from collecting duties on behalf of the EU - unless the EU reciprocates and does the same for the UK, thereby calling into question the workability of the government’s plan for a “facilitated customs arrangement” as outlined in the White Paper. The next stop for both of these bills is the House of Lords, where the debates continue in September.

Committee calls for implementation of SAWS scheme

A Home Affairs Select Committee report which looks at the future policy for migration between the UK and EU has recommended that the government introduces a Seasonal Agricultural Workers Scheme (SAWS) as soon as possible. This, it finds, is based on clear evidence that there are insufficient numbers of workers coming from the EU to take up roles in UK agriculture. The report also recommends that more detail should be made available on the long-term policy for UK-EU immigration in general as the committee believes that UK businesses are being held back by the uncertainty over the future strategy. The NFU continues to raise the need for urgent action to meet the industry’s seasonal and permanent labour requirements.

The voice of British farming

Although every effort has been made to ensure accuracy, neither the NFU nor the author can accept liability for errors and or omissions. © NFU

Key Developments – View from the EU

Article 50 negotiating rounds

Dominic Raab made it to Brussels twice in July, leading to comments that he has spent more time with Michel Barnier in his first three weeks in the job than David Davis did this year. Speaking at a press conference at the end of the second negotiating round, Mr Raab set out the three things that still needs to happen; firstly to complete the Withdrawal Agreement, concluding the remaining issues, secondly to complete the protocol on Northern Ireland and Ireland and finally to agree a political declaration that sets out a clear and precise vision for the future relationship. He also said that he and Michel Barnier had discussed the government’s White Paper on the future relationship, saying that there was a “new dynamic” to this particular aspect of the negotiations. In response Michel Barnier agreed that the White Paper was useful for making progress and was pleased to see a number of aspects contained in the document, including recognition by the UK that the European Court of Justice would remain the ultimate arbitrator of EU law. However he heavily criticised the UK’s proposal to have a “facilitated customs arrangement”. He said that the EU would never delegate customs laws, collection or VAT to a non EU member not subject to EU governance requirements. He reiterated that the four freedoms of the EU’s Single Market (goods, people, services and capital) were indivisible, pointing out that “some UK proposals would undermine our Single Market which is one of the EU's biggest achievements.” Michel Barnier also questioned the limitation that the common rule book would only cover rules at the border, questioning whether this would mean that rules on GMO use or plant protection products would be included.

European Commission publishes “no deal” planning communication

The European Commission has published a communication that sets out the implications of a “no deal”, also known as cliff edge or disorderly withdrawal scenario. The Commission is at pains to point out that the Article 50 negotiations are ongoing, but that work on preparedness at all levels and for all outcomes should be stepped up. If the Withdrawal Agreement is agreed and ratified by 30 March 2019 (11pm 29th March 2019 GMT), it would provide for a time limited implementation period, thus giving a further 21 months to prepare for the day when EU law would cease to apply to and in the UK (i.e. from 1st January 2021) (referred to as an orderly withdrawal). However the Commission sets out that in the absence of an agreement, or if the Withdrawal Agreement is not ratified in time by both parties (in the UK this will involve both a meaningful vote on the agreement and the approval of the EU (Withdrawal Agreement) Bill – (see article above) there will be no transition period. As such EU law will cease to apply to and in the UK as of 30th March 2019. It should however be noted that the EU (Withdrawal) Act converts EU law as it stands at the moment of exit into UK domestic law, but the UK will be considered a third country and the EU would insist on the UK meeting the obligations as such, including those relating to the EU’s complex plant and animal health status rules (known as SPS and veterinary checks).

NFU Activity

NFU delegation to Geneva

Members of the NFU’s Brexit and BAB teams have been in Geneva discussing progress towards the UK re-establishing itself as an independent member of the WTO. The first step

The voice of British farming

Although every effort has been made to ensure accuracy, neither the NFU nor the author can accept liability for errors and or omissions. © NFU

towards this was taken this month when the UK submitted its draft schedule of concessions for trade in goods. The schedule sets out the baseline for which the UK will operate its multi-lateral trade policy post Brexit and is the starting point for future free trade deals that the UK Government wishes to negotiate. The circulating of this draft schedule coincided with the NFU’s fact-finding mission to the WTO, allowing the team to discuss the details of this significant development with officials, including the UK’s Ambassador to the WTO, Julian Braithwaite.

UK farming unions respond to Brexit White Paper

The Presidents of the UK’s main farming unions (NFU, NFU Cymru, NFU Scotland and Ulster Farmers’ Union) met at the Great Yorkshire Show to discuss the implications of the government’s White Paper on the future relationship with the EU. The Presidents agreed a joint statement welcoming the White Paper and called on government and the EU to work urgently to achieve an agreement that delivers free and frictionless trade between the two.

NFU meets with Food Standards Agency to discuss “common rule book”

This month the NFU Brexit team met with counterparts from the Food Standards Agency’s EU Exit Team. The team within the FSA has been tasked with ‘keeping food at least as safe as it was before Brexit.’ On the common rule book Defra and the FSA are considering what will go into it, but the UK government does not intend to publish its intended list of rules. Instead it will await the EU to present its list and seek to negotiate from there. The FSA is also looking to expand the UK’s capacity to undertake risk assessments and is considering how to take risk management decisions i.e. how to approve a product and on what basis, once we leave the EU’s decision making bodies and committees.

Trade Continuity – How government plans to avoid the cliff edge

The EU currently has 40 Free Trade Agreements (FTAs) with around 55 different countries. The NFU recently met with officials at Department for International Trade (DIT) to discuss how the government is planning to ensure continuity of trade with these third countries once we leave the EU. When we leave the EU we leave these agreements as they only apply to the EU and its member states. However in order to avoid disruption and the complete breakdown of trade with these countries – including disruption to trade of agri-food goods, the DIT told us how UK is seeking agreement with the respective countries to roll these agreements over with the UK post Brexit.

The voice of British farming

Although every effort has been made to ensure accuracy, neither the NFU nor the author can accept liability for errors and or omissions. © NFU