With the Prime Minister having secured ‘collective agreement’ from her Cabinet on the EU Withdrawal Agreement last night, the full text of the deal has been published. Abi Kay explains what farmers need to know.
After a crunch meeting with her top Ministers yesterday, Prime Minister Theresa May told journalists waiting outside Number 10 that ‘collective agreement’ had been reached on her EU Withdrawal Agreement.
Since then, the Brexit Secretary, Dominic Raab, and the Work and Pensions Secretary, Esther McVey, have resigned.
They were followed out of Government by junior Brexit and Education Ministers Suella Braverman and Anne-Marie Trevelyan.
Speculation is now rife that Defra Secretary Michael Gove will replace Mr Raab as Secretary of State for Exiting the EU.
The ‘backstop’ – what is it?
The concerns of Ministers who have quit centre on the ‘backstop’ arrangement which has been designed to prevent a ‘hard border’ being erected on the island of Ireland.
This backstop would keep the whole of the UK in a ‘single customs territory’ with the EU in order to avoid new checks at the Irish border.
The Government insists it will not be used because a future trade agreement or separate Irish-specific mechanism can deal with any border issues, but some experts believe the backstop could become the default position.
Under the terms of the Withdrawal Agreement, the backstop will be activated if a deal on a future UK-EU relationship is not in place by December 31 2020.
Alternatively, the UK can apply for an extension of the transition period before July 1 2020 with agreement from the EU. This mechanism can only be used once.
What happens to agri-food trade in a backstop scenario?
In a backstop scenario, there would be no tariffs, quotas or checks on rules of origin for agri-food trade between the UK and the EU.
The UK would also be unable to drop tariffs on agricultural goods from countries outside the EU, making trade deals with the UK less attractive for nations like the USA.
The customs union which the UK would be tied into is not fully defined in the Withdrawal Agreement, with the two sides having to agree how it will operate by July 2020.
But in theory, the UK could be forced to open up its market to any country the EU concludes a free trade agreement with, without being offered reciprocal access and with no say over the terms of the deal.
This is the position Turkey is in with regard to its own customs arrangements with the EU. Though Turkey’s customs arrangements with the EU do not cover agriculture, the UK’s would.
Potentially then, the EU could sign future trade deals with other countries – such as Australia and New Zealand – which may have an impact on the UK’s domestic lamb market, for example.
Northern Ireland-UK agri-food trade
Further provisions in the backstop agreement would force Northern Ireland (NI) – but not the rest of the UK – to maintain EU food standards, such as bans on hormone-treated beef or chlorinated chicken.
This means existing checks at ports on agricultural products travelling from Great Britain to Northern Ireland would need to be ramped up.
Having a different set of rules in place for NI, which would have no democratic say in their creation, and increasing trade barriers between NI and the rest of the UK is a red line for unionist politicians who have vowed to vote against the deal in parliament.
‘Level playing field’ provisions
If the backstop does come into play, the UK will also be forced to follow EU environmental rules on air quality and nature and biodiversity protection to ensure a ‘level playing field’ for competition.
Key EU environmental principles such as ‘polluter pays’ and the ‘precautionary principle’ will be enshrined in UK law under the terms of the agreement too.
The NFU has previously criticised the EU for inappropriate application of the precautionary principle, which it claims has led law-makers to focus on theoretical harm, as opposed to actual risk, when it comes to crop protection products.
Adopting the precautionary principle could be another barrier to negotiating free trade agreements with other countries.
Both the US and Australia complained to the World Trade Organisation’s Committee on Technical Barriers to Trade last year about the EU’s hazard-based approach to crop protection regulation.
Can the UK leave the backstop?
If at any point after the transition period ends, the UK or the EU considers the backstop is no longer necessary, it can notify the other party.
A Joint Committee, co-chaired by an EU Commissioner and a UK Minister, or other specified high-level officials, will then consider this notification.
After consideration, the backstop may be terminated, but only with the agreement of both the UK and the EU.
The UK Government expected to have been much further on in negotiating a future trading relationship by this stage after a preliminary divorce deal was reached last December, but talks were held up by the Irish border issue.
The Withdrawal Agreement does, however, contain a ‘political declaration’ which sets out some very broad outlines for the basis of a future partnership.
The declaration says any future agreement should ensure zero tariffs, fees, charges or qualitative restrictions on goods.
It also seeks to bind the UK to EU environmental and climate change rules even outside the backstop on the grounds of ‘open and fair’ competition, and makes clear new barriers to trade in agricultural goods could be erected if the UK chose to diverge.
Common rule book
Reports have suggested the Cabinet agreed to support the Withdrawal Agreement on the grounds that the EU-UK ‘common rule book’ on agri-food outlined in the Prime Minister’s Chequers plan would be dropped.
Instead of a common rule book, the political declaration proposes ‘deep regulatory and customs co-operation’.
The common rule book would have covered ‘only those rules necessary to provide for frictionless trade at the border’, excluding areas such as food labelling.
NFU president Minette Batters welcomed the progress made on reaching a deal.
She said: “It is critical that we avoid the mayhem of a no-deal Brexit in March of next year, and this Withdrawal Agreement paves the way for a transition period that maintains free and frictionless trade with the EU, and provides stability for farmers and the wider economy.
“There is still a huge job to be done in negotiating the details of our future relationship with the EU: one that maintains free and frictionless trade, allows continued access to sufficient overseas labour where needed, and supports farmers in providing jobs and driving growth in rural communities, providing the raw materials for a domestic food industry that employs 3.8m people and generates £113bn in value for the UK economy.
“I hope this Withdrawal Agreement will now pave the way to negotiating a future relationship that secures all of these vital objectives.”
FUW president Glyn Roberts said: “The FUW has been consistent in its view that the best way to minimise disruption and economic damage to agriculture and other industries is to remain within the Common Market and the Customs Union after leaving the EU.
“Anything that falls short of that will bring with it obstacles in terms of trade and other issues, with inevitable consequences for our industry and economy.
“The draft Withdrawal Agreement may be a step in the right direction away from the abyss, but until we have been given the opportunity to study the text of the draft agreement it will be impossible to tell whether that step is significant enough to mitigate any of the extreme risks faced by our industry and others.”
NFU Cymru president John Davies said: “I give a cautious welcome to the proposals that are outlined in the document as regards the trade in goods.
“Whilst our access to the European markets can never be the same after Brexit as it is now, I am encouraged by the fact that if the aspirations in the document are realised, then we are at least some way towards the free and frictionless trade that we all want to see with the EU.
“I would also add that whilst I welcome the political declaration regarding our future economic partnership as a real step in the right direction for Wales’ farmers, it is an aspiration and not a legal declaration. That’s why it will be crucial that all parties must negotiate in good faith during the transition period to make such an aspiration a reality.
“I am pleased that the agreement also recognises the importance of geographical indicators and provides the opportunity for protected food names such as our world-leading PGI Welsh Lamb and Beef designations to be provided the same level of protection under UK law as they currently receive under EU law following the end of the transition period.
“There is still a very long way to go, including sign-off at the European Council summit on November 25, and the meaningful vote in Parliament, expected to take place next month. There are very significant question marks over whether the agreement will secure Parliamentary approval, and if such approval is not secured then NFU Cymru will need to reassess its position.”
After the Prime Minister announced her Cabinet had reached ‘collective agreement’ on the Withdrawal Agreement, European Commission President Jean-Claude Juncker wrote to European Council President Donald Tusk to say ‘decisive progress’ had been made.
Mr Tusk has now said a Brexit summit with the EU’s 27 national leaders will take place on November 25 so they can also approve the deal.
After that, the formal process of ratification can begin, with December 10 being mooted as a possible date for a vote in the UK parliament on the terms of the agreement.
It is very uncertain, however, that MPs will support the deal, with few backing it during a debate in the House of Commons today after a statement from the Prime Minister.