Retaining tariff-free access to EU markets, which currently account for 82 per cent of UK cereal exports and virtually all rape seed exports, is important if it is to remain competitive.
That is the view of David Swales, AHDB head of strategic insight. “If we are not in the single market we will need to reach some trade agreement with the EU. This could be a more comprehensive free trade agreement than already agreed that doesn’t eliminate all barriers to trade.”
The EU currently operates a tariff rate quota system with non-EU member states. Cereal imports within quota are subject to a tariff of €12-€16 (£10.80-£14.40)/tonne whereas EU tariff rates applied to exports exceeding quota are in the order of e.g. €95 (£85.50)/t for wheat, said Mr Swales.
Should European markets become more difficult to access, the burgeoning middle class, particularly in the Asia-Pacific region, could be cause for some optimism in the longer term, according to Mr Swales. “There will be nine billion people in the world by 2050. The growing middle class will have reached 4.8bn by 2030, providing other opportunities to export.”
Currently there is debate about whether the UK will inherit a share of EU agreements with non-EU nations, said Mr Swales. “This will probably not be the case. This will be a challenge because of the time it takes to set them up – typically 7-10 years. We have just over two years. It is a key priority going forward but its importance could be overplayed. Arguably more important is the myriad of technical agreements such as sanitary and phytosanitary requirements. For example, we export a lot of seed potatoes to Egypt.”
With the UK likely to adopt a liberal approach to imports, according to Mr Swales, this could represent a threat to trade. “We need to be mindful of the effect on our domestic industry. Are the pharmaceutical, financial and motor industries going to be the ones the government focuses on and where does food and agriculture fit within the hierarchy?”