A new report has found that reduced exports of British food to the EU cost the UK economy £3.1bn last year.
An EU-UK SPS Agreement: The perils and possibilities of (re)alignment, published by the Centre for Inclusive Trade Policy (CITP), found that this corresponds to a 16% fall in food exports per year, since the UK formally left the EU in 2021.
The CITP argues that a divergence on food practices and legislation since Brexit is largely responsible for the fall and proposes a new sanitary and phytosanitary (SPS) agreement as a solution.
Brexit harm
The report noted a total £3.1bn (11%) drop in agricultural exports between 2022 and 2023. Imports declined £5.9bn (8.8%) over the same period.
A reduction in trade between the UK and EU contributed significantly to the decline, with the yearly fall in exports to the EU since Brexit estimated at £2.82bn.
While acknowledging the existence of other geopolitical factors – such as fallout from the Covid-19 pandemic and Russia’s invasion of Ukraine – the authors note “trade flows between the UK and EU, particularly exports, demonstrate no recent signs of regaining previous levels”.
Farmers who reported feeling negatively towards Brexit highlighted “new regulatory costs” as among their top issues – a sentiment that was shared across a number of sectors, including cereals growers, vegetable growers, dairy, beef and sheep producers.
Diverging standards
The report found new regulation arose from three types of divergence between the UK and EU across food practices: “formal legislative divergence, process divergence (encompassing regulatory formation, the internal market, and enforcement) and strategic divergence”.
Report author, professor Emily Lydgate, told the Independent:
“We’ve found significant divergence in EU and UK agri-food legislation since Brexit. This is more than just new regulation – it’s also differences in ways of setting and enforcing that regulation. This divergence has increased costs and reduced trade to the EU.”
On legislation and processes, the CITP highlights an increasing gulf between food standards in the EU and UK since the transition period, with an overall decline in UK food standards relative to the EU.
The EU has introduced “stricter” standards on the use of pesticides and hazardous substances, which the UK has failed to match.
Lack of cooperation
Despite the EU-UK Trade and Cooperation Agreement (TCA) including provisions to facilitate collaboration on food standards and regulation, the report found that this had failed to materialise.
It noted that the Trade Specialised Committee on Sanitary and Phytosanitary Measures, designed to be a “joint forum” for the EU and UK to discuss SPS measures, only meets once per year.
There were also no mechanisms such as industry consultations through which stakeholders could engage with the body to put forward recommendations.
‘Reset’ pressure
The report advocates for a new SPS agreement between the UK and EU to boost trade, arguing that this would require “not only legislative re-alignment in the identified areas, but [must] also address process divergence through closer institutional cooperation and reform of UK border enforcement protocols”.
Prime minister Sir Keir Starmer promised to negotiate a new veterinary agreement with the EU.
However, his attempts to “reset” the UK’s relationship with the EU have not resulted in anything tangible, with European officials complaining of a lack of clarity around what the UK want from talks.
Willingness to cooperate?
However, the report adds there are signs that the new Labour government might be willing to compromise to ensure improved trade in the future.
The authors note that the Product Standards and Metrology Bill, proposed by the government, includes a proposal for “unilateral alignment with EU environmental product regulation” in a practical bid to ensure minimal barriers.
They said:
“If the UK government is prepared to accept the process set out in the Bill, then they might be prepared to do so in the future with regard to SPS measures.”
