Agriculture accounts for around 0.7% of the UK’s GDP and a little over 1% of total employment. The comparable figures for the EU as a whole are, respectively, 1.6% and 5%. But, as a trade policy issue, agriculture carries a weight and level of contentiousness that is disproportionate to its economic size. This is largely because discussions on agriculture have found a way of intersecting with an eclectic range of often emotive, policy issues including: food security and safety, rural development, environment, animal welfare and even culture.
The Uruguay Round of trade negotiations, that concluded in 1994 with the establishment of the WTO, brought agriculture under the discipline of trade rules. However, trade interventions still abound. Average MFN tariffs applied by the EU (and thus presently by the UK) are around 14% (compared to around 6.3% for all goods), and nearly 22% of agriculture tariff lines have duties of 15% or higher. Under the EU’s Common Agricultural Policy (CAP), a range of different types of payments and subsidies are made to farmers, though the value of these has been declining. OECD data show that agricultural support, measured as total transfers from consumers and taxpayers to farmers as a result of government policies, was around 21% of gross farm receipts in 2016, down from over 30% in 2002.
Once it leaves the EU, the UK will need to decide whether it liberalises tariffs on a multilateral or preferential basis, and what sort of subsidies it will implement.Extricating the UK’s commitments on these from the EU’s at the WTO will present challenges to both parties. Decisions on payments will require a wider debate on the public costs and benefits of these subsidies.
Commentary
The Centre for Inclusive Trade Policy in conjunction with Chatham House and Resolution Foundation held their first UK Trade Policy Forum since the Covid-19 Pandemic on February 28th, 2023. This forum provided an opportune time to reflect on the aftershocks of the pandemic, Russia’s war in Ukraine and what exactly is happening at Number 10 […]
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24th November 2021
Online
Frontier Economics and Trade Knowledge Exchange are delighted to invite you to a virtual panel discussion on the role of trade policy in addressing climate change. This event is timed to fall between the COP-26 summit on climate change in Glasgow and the 12th Ministerial Conference of the WTO to be held in Geneva. We […]
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Introduction With the decision taken by the UK government to exit the EU there are a myriad of questions and issues for all sectors of the economy including agriculture, the rural environment and the food economy. Although agriculture is a small part of the UK economy (0.59% of GDP in 2017) its importance is far […]
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13 June 2019
London, UK
The UK’s approach to agriculture and trade is set to change after Brexit. The Agriculture Bill currently before parliament looks set to overhaul a number of aspects of policy. We look at some of the key policy and commercial issues.
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With the UK parliament showing little sign of resolving its differences of opinion with itself on the UK’s departure from the EU, the UK government has published a list of customs duties that would apply “temporarily” in the event of a “no-deal“ exit. The government says that under such arrangements 87% of imports to the […]
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The United States Trade Representative (USTR) has released negotiating objectives for a prospective Free Trade Agreement (FTA) with the UK. The publication of such objectives is a routine event before the US enters into any trade negotiations. But it made headlines in the UK, which has little or no direct experience of trade negotiations. The […]
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Introduction The Agriculture Bill is part of the Government’s Brexit preparation. As the UK leaves the EU, British farmers will no longer be able to receive EU subsidies and will not have to comply with a number of regulations. However, it is likely that they will require financial support. The Bill brings together agriculture and […]
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Guest author for the TKE and agricultural trade expert Chris Horseman writes about bananas and Brexit. This article contemplates what the UK might do about its external trade regime after Brexit, and uses the example of bananas to illustrate some of the challenges.
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The UK does not start with a blank sheet of paper when it comes to exiting the EU. This article explores the issues encompassed by existing and continuing support for farm businesses and the rural environment, as well as the UK’s future agri-food trade relations.
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Observations on the Nexus Between Trade Law and Domestic Regulation from TKE partner, Frontier Economics.
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