A new era for UK trade: Setting environmental standards for the agri-food sector

The UK is now developing its own trade policy outside the EU. This means there is a need to re-evaluate the UK’s approach to environmental standards in trade, including relating to agri-foods.

As the UK negotiates free trade agreements (FTAs) with partners such as Australia, New Zealand and the US, attention turns to the implication of these new trade agreements influencing the sustainability within the UK, and also more broadly globally.

Standards placed in the spotlight in the UK debate include those that apply to food, health, animal welfare and the environment. In particular, food and environmental standards – and their interlinkages – are considered among the most critical given their role in transforming the food system to deliver on climate, biodiversity and other environmental commitments. Consequently, it is important to ensure that these standards are both maintained over the course of new trade arrangements and given space to develop as required as new environmental objectives are adopted over time.

What standards to focus on?

A recent briefing by IEEP discusses the current role of agri-food standards in the context of the UK’s trade policy. It identifies a set of key criteria to define ‘core’ environmental measures – and related standards – for agri-food production in the future UK trade agreements, and how to protect and uphold these standards both domestically and internationally.

The criteria for identifying the most crucial standards – or standard-setting measures – to have in place include:

  • The overall environmental significance and/or impact of a standard/measure.
  • The extent to which a standard/measure imposes constraints on the management of agricultural land and the production of food on agricultural enterprises.
  • The extent to which a standard/measure has an impact on the average production costs of 

How to protect the standards?

For existing standards to deliver on environmental objectives, they need to be upheld and protected. As trade liberalisation seeks to eliminate barriers to trade such as tariffs and regulations, governments must guarantee a good regulatory framework, to safeguard and not derogate from their environmental commitments.

Several avenues can be explored to ensure this:

Domestic measures: implementing domestic measures, such as a voluntary use of labels for food or reinforcing the status of current domestic agri-food standards, can play a key role in safeguarding – and elevating – the environmental bottom line. This is one way for governments to signal to both domestic and foreign producers in the agri-food market their earnestness in maintaining current standards.

Tariff measures: going further, governments could apply conditional tariffs on imports in relation to environmental standards and/or introduce new environmental standards on imported agri-foods (See table below). This will incentivise the import of agri-foods meeting certain environmental standards by introducing differential tariffs, penalising less sustainable imports. New standards can also be introduced to cover the process and production methods, as well as standards for products themselves.

Trade flanking measures: a critical element to upholding standards relies also on supportive changes in the wider governance, capacity and the evidence base. A possible way forward could be for an independent body to identify key UK environmental standards on the basis of the evidence available and propose these to the government, both in relation to current FTAs and the country’s longer-term trade policy. A robust evidence base, as well as suitable capacity and resources, are required to carry out this process.

Table: possibilities for using domestic and import standards as the basis for tariff measures, as well as product and production standards

 

Product standards

Production standards

Domestic standards

Apply to products for sale and produced in the UK (e.g. maximum pesticide residue levels in food)

Apply to domestic means of production (e.g. maximum levels of fertiliser use)

Import standards

Apply to imported products for sale in the UK (e.g. permissible inorganic fertilisers and pesticides)

Apply to means of production of imported goods (e.g. organically produced food)

 

 

Drawing parallels with the EU

The relevance of agri-food standards and their future role in delivering environmental objectives is not limited only to the post-Brexit case of the UK. Under the European Green Deal, the European Commission has committed itself to a number of initiatives that will impact standards for trade in the agri-food sector, such as the initiative on deforestation and forest degradation. This initiative seeks to minimise the EU’s contribution to deforestation and forest degradation worldwide and promote the consumption of products from deforestation-free supply chains in the EU, including not only forestry products but also agricultural commodities causing deforestation.

In delivering this initiative the Commission must weigh which standards it will place on goods sold on the EU market – ensuring they are feasible to interpret and implement for a wide variety of commodities – while considering the trade-sensitivity of these standards. The discussion and developments taking place currently in the UK – including the ideas put forward by the IEEP briefing – can also support the future debates in the EU, helping to identify the policy framework to be put in place to ensure trade that is free from deforestation.