Is it time to have the long and boring discussion about the difference between standards and processes & production methods?
Trade policy tends to focus on outcomes (standards). So for imported food to be sold on the UK market it needs to be made to UK [or sometimes equivalent] standards.
Trade policy doesn't tend to deal with how (processes & production) the food is made e.g. how cows were treated.
But this is changing somewhat. The EU-Mercosur trade deal opens a tariff-rate quota exclusively for shell eggs birthed (?) from chickens subject to animal welfare conditions equivalent to the EU's.
In EU's WTO dispute with a number of countries over whether its restrictions on import of clubbed seals are WTO compliant there was some discussion re: whether the EU Seal Regime prescribes 'related processes or production methods´ for seal products, but it didn't get anywhere
(Ban was upheld (on basis EU made some tweaks) because deemed necessary to defend public morals)
Anyway, I digress, in UK context big discussion now seems to be over whether it is right to ask producers exporting to UK to both comply with UK food standards (a given) AND process and production methods (more controversial).
For producers in some countries these conditions wouldn't necessarily be a problem due to them being able to demonstrate equivalent methods quite easily (e.g. New Zealand), but for others it could be (e.g. US, developing countries).
There's also issues around benchmarking - ie who's approach is better and why?
It all gets tricky quickly.
Anyhow, if not a ban on certain process and production methods - are there other approaches that could works?
Regardless, while these questions of fairness vis-a-vis production environment are not readily dealt with via existing trade rules - the desire to create a level playing field bubbling up everywhere (see also: US and EU) and is here to stay.
(There are *so* many typos in this rambly thread, and for that I can only apologise.)
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Today's publication of the border operating model an explicit acknowledgement that exiting the EU's customs union and single market will create additional costs for British businesses trading with the EU.
Positively, this means we no longer have to discuss blockchain enabled zeppelins and "GATT 24", and can focus on preparing for the rupture at the end of the year.
For imports, customs controls are being phased in in two stages. From Jan 1st, importers from EU will have to decide whether to
- declare imports & pay duties as would from RoW; or
- take advantage of scheme allowing deferral of declarations and payment of duties for 6 months
Many people, including me, believe that similar measures (allowing for CE marked goods to continue to be accepted in the UK) will be reintroduced. This is because businesses are simply not prepared for the switch, and there is still no real clarity on the replacement.
Big positive to my mind that UK now accepts that there will be new administrative requirements placed on businesses sending goods from Great Britain to Norther Ireland.
Pretending otherwise helps no one.
A reminder of how it is determined whether a product going from NI to GB is subject to EU tariffs, according to the protocol:
Snap assessment: much more detail needed, some things EU will disagree with and quite a bit of domestic-focused spin BUT it demonstrates UK taking obligations seriously and hopefully paves way for UK and EU to move forward on implementing the Protocol.
Some areas of UK-EU disagreement that people might be less aware of (so not LPF, ECJ, fish etc):
1. EU wants FTA to cover procurement, UK doesn’t. 2. UK wants FTA to cover audiovisual services, EU doesn’t.
3. EU wants to use an off the shelf approach to rules of origin (so PEM), UK wants bespoke. 4. UK wants broad mutual recognition recognition of conformity assessment (allows UK-based notified bodies to certify products to EU standards), EU doesn’t .
5. EU wants climate change to be covered by broad level playing field commitments, UK wants it relegated solely to energy chapter.
‘A Canada-style free trade agreement’ should not be taken to literally mean the UK and EU will copy and paste the EU’s free trade agreement with Canada. It is just an example of an accepted balance of access and obligations.
A more recent example of the sort of relationship the UK is looking to negotiate would be the EU’s trade agreement with Japan.
Or if we’re going hipster, could look at negotiations that haven’t concluded yet, and mandate for EU-Australia FTA.
But another thing to understand, is that the trade agreement is just one pillar of future EU-UK cooperation, that will sit alongside cooperation in other areas such as security, defense, social security.
On what to expect re: the negotiations on the future relationship, I expect something to be agreed later this year (not before the summer).
This piece I wrote last November outlines what I expect the trade agreement to look like: cer.eu/insights/what-…
On the divergence/alignment debate, I think that there is still much misunderstanding. For the most part, the moment the UK has the right to diverge, for trade purposes, the EU will treat the UK as if it already has.