Independent report

Trade and Agriculture Commission: Final Report (executive summary)

Updated 12 March 2021

This Trade and Agriculture Commission has ceased to operate and has been superseded by a new Trade and Agriculture Commission, which has a new role and membership.

Chair’s foreword

In July 2020, the Secretary of State for International Trade, the Rt Hon Liz Truss MP, invited me to chair a new independent body, the Trade and Agriculture Commission. There had been a growing clamour for such a Commission over recent years and the timing of our establishment made good sense.

Our task was to advise the UK government on how best to advance the interests of British farmers, food producers and consumers in future trade agreements. To some this might seem straightforward, but it most definitely is not. Providing a set of recommendations which properly balance liberalisation of trade with what matters most to UK citizens and is fair for the UK agri-food sector is daunting. But this is about the future and the priorities we set now that the next generations will judge us on. What we propose is not short-term and some components will take time to implement.

Becoming an independent trading nation for the first time in over 40 years offers a major opportunity. UK exporters can seek out new markets and the UK can help shape the rules which govern international trade.

Setting out as an external trading partner of the EU in the midst of a global pandemic was never going to be easy. Agri-food businesses are, like many other businesses, going to have to make adjustments to remain competitive. We looked hard at the options, but in our reality check we conclude that not all will be winners.

As the trading environment evolves so too does consumer behaviour and the choices consumers make. There is much greater awareness of the impact of farming and food production on the environment. Consumers want to know where their food comes from and how it is produced. They want to be assured that animals are treated humanely and that workers’ rights are protected. There is less tolerance for the huge amounts of food wasted in some parts of the world while millions go hungry elsewhere.

The question we had to ask ourselves, therefore, was how to ensure a competitive farming sector whilst providing sustainably produced affordable food. There are no easy answers. We know this could have become an academic exercise with unrealistic outcomes. So, we checked that what we were proposing was compliant with international rules and that it was practical. We then made assessments about how our potential trade partners would view the UK’s approach. We believe our recommendations pass those three tests.

We started from the premise that we need a long-term approach to feeding the nation, focusing on 3 key areas – affordable food, protecting the environment and helping those who want to lead healthier lives in a system which is fair for all involved.

We also need a UK trade policy which creates a fair and safe farming system for all. This means no race to the bottom, no backsliding or turning back the clock on standards and an ambition to play a leading role in international agricultural issues.

Our aim has been to set the principles, strategies and objectives which others will measure us on as trade agreements are reached. To help inform our thinking, we sought the views and insight of farmers, businesses, trade bodies, academic and civil society organisations and elected representatives across the United Kingdom. Over 400 responded to an evidence survey or took part in virtual round-table discussions and regional roadshows in England and the devolved nations.

Our working groups on competitiveness, standards and consumer issues gathered evidence from experts in agri-food, animal welfare and the environment. Trade policy experts and trade negotiators also gave us advice. We have been told that our engagement process was exemplary in its reach but, more importantly, the quality of the insights we received made our task a little easier. We are immensely appreciative of all those who have contributed expert knowledge to help us formulate our recommendations which, we believe, are innovative, operational and pragmatic.

We were created as an independent, non-political Commission. This has allowed us to consider the views from highly experienced specialists, bringing perspectives from across the agricultural and trade sectors. We have had robust debates throughout. We have not always agreed with each other, but the collective commitment to our mission has been instrumental in reaching common conclusions which are reflected in this report.

Due to COVID-19 restrictions, all Commission meetings and external engagement events were conducted virtually. In some ways this was a boon, allowing us to engage with people from across the UK and beyond. But the fact that Commission members never met physically, apart from a few at our launch event, was a regret.

My thanks also go to the dedicated team who supported our deliberations, kept us organised and worked tirelessly to create this document.

It has been a great pleasure to serve as Chair of the Trade and Agriculture Commission.

Tim J Smith

Executive summary

We are at a crossroads.

A nation’s approach to liberalisation of trade in agricultural commodities is seen by trading partners as totemic; a litmus test. What we must resolve is a tough nut to crack. We are trying to plot a path on which we confidently embrace an open, liberalised trade strategy, and a genuinely reciprocal approach to negotiations. Meanwhile we are trying to safeguard important standards in a way that is not protectionist or trade distorting. It is a path which promises that we will show genuine leadership on climate, environmental, ethical and welfare issues. We will not undermine decades of solid, hard-won progress, nor will we ‘offshore’ the impacts of food consumption in the UK. This approach demands that we provide clarity in our vision, principles and recommendations. If we are ambitious and positive in our outlook, we will overcome the danger of inertia.

The UK has been navigating a path through some of the most uncertain weeks and months that any of us have experienced in our lifetime. When this Commission started its work in July 2020, the unrelentingly complex process of reaching an agreement with the EU had not reached a conclusion. COVID-19 was placing unprecedented pressures on our public services, businesses and people. But as we publish this report at the start of the new year, there is a sense of fresh optimism about what is ahead. The EU-UK Trade and Cooperation Agreement means the UK leaves the EU customs union and single market with a clear framework, with a zero tariff, zero quota arrangement at its centre. It is a crucially important milestone, and, whilst there is proving to be an inevitable period of adjustment and initial disruption, the agreement has provided the country with reassurance. Meanwhile COVID-19 is still the backdrop for everyday lives, but the vaccination programme gives us all hope of a return to normality.

Through these recent months, our food and farming system has remained steadfast and resilient. This is testament to the expertise and determination of the sector and the supply chain structures that have evolved over decades. After an initial flicker of panic, consumers have largely had continued access to the diverse, high quality and affordable food they are used to. If anything, food has become an even more central focus of daily life. That is not to downplay some of the challenges; food poverty is a problem which should by now have been consigned to the history books. Our hospitality sector has been particularly hard hit. Above all, the whole situation has been a reminder that we should not take our food supply for granted.

We now embark on a new phase, as an independent nation, of crafting and discharging a progressive new trade policy. The UK can present its vision for trade to the world. We can make a clear statement about our priorities, our level of ambition, how we want our global value chains to work and what we want to achieve with our trading partners. We must do this quickly but in a measured, thoughtful way. The world is watching us with interest to see what path we take. What we do in the coming months will set the tone for some time to come. We need to signal that we are not going to remain constrained by our former membership of the EU, and that we are genuinely open to new, liberalised trading relationships. 2021 is also a pivotal year for international engagement. Our Presidency of the G7 and role as host nation of the COP26 give us a unique confluence of opportunities to show strength and leadership.

This brings us back to the critical challenge identified at the outset. We need to be clear about our strategy and create coherence across different government departments, before we sit down at the negotiating table.

It is clear that the farming sector is among those most affected by EU exit. The shift away from decades of subsidy and control from the Common Agricultural Policy means that the sector is going to need to recalibrate to a fully competitive scenario. The industry will restructure and many, but not all, will adapt. There is a lot at stake; our farmers are not just producers of food, but custodians of our countryside, natural environment and biodiversity, and the bedrock of rural communities. Trade will be key to competitiveness, and expectations of the sector from new exporting opportunities are high. It is expecting to unlock an array of new opportunities for meat, dairy, cereals, fish, whisky and a host of other iconic UK products.

Our consumers, although prioritising price, are also excited by the possibility of having more choice of products from around the world. We are all becoming ever more discerning of where our food is from and how it is produced. Increasingly, environmental footprint, ethical factors and animal welfare are shaping our decision making. Transparency is critical throughout the supply chain. Traceability provides a knowledge of provenance. Labelling has a role, and in particular country of origin labelling and third-party assurance schemes provide convenient ways to signal that the product has reached a certain standard. Familiar examples would include Fairtrade, Red Tractor and the Rainforest Alliance. But, with busy lives, people often don’t have the time to scrutinise what they buy and expect the reassurance that the government has this in hand and that they can shop freely in the knowledge that basic standards are being adhered to and that there is traceability throughout the supply chain.

For some, this trust in the framework of standards has recently been eroded. High environmental, ethical and animal welfare standards that have been built up in our domestic food system, over many decades. They appear to be threatened by the potentially pernicious impact of signing agreements with countries whose food standards appear to be weaker than our own. Farming unions, businesses, civil society, consumer groups and celebrities have lined up to push for a safeguarding of these important standards.

In response, we have articulated a vision of the future success that the UK government should aim for when developing and deploying a trade strategy. This vision is reflected in a series of 6 principles that we suggest should guide government in this work.

The vision

The UK has an ambitious trade policy which contributes to a global farming and food system that is fair and trusted by all its participants, including farmers, businesses and citizens, from source to consumption. Our food is safe, healthy, affordable, produced in a way which does not harm the planet, respects the dignity of animals and provides proper reward for those involved.

The principles

The UK should aim to:

• promote the liberalisation of trade, to positively influence innovation and productivity, and price and choice for consumers
• prioritise a thriving domestic agri-food sector supported by complementary domestic and trade policies
• ensure that agri-food imports meet relevant UK and international standards on food safety and biosecurity
• match tariff-free market access to relevant climate, environment, animal welfare and ethical standards, remedying competition issues arising where permitted imports do not meet relevant UK and international standards
• lead change, where needed, to the international framework of rules on trade and relevant standards, to address the global challenges of climate change and environmental degradation
• support developing countries in accessing the full benefits of the global trading system

To realise the vision of an ambitious trade policy that respects the principles we have set out, we have developed a series of recommendations for action in 5 areas. These are designed to be mutually reinforcing in their impact, and we believe the UK government needs to take action across all of these areas.

First, we recommend that the UK government should develop a bold, ambitious agri-food trade strategy. This would enable a coherent approach to the sector that respects the different responsibilities of the UK government and the devolved administrations and provides a framework of priorities for future trade negotiations. The strategy should be based on a liberalising approach to trade policy, focused on bringing new opportunities for UK business, tempered with safeguarding of important standards. The agri-food trade strategy would need to be framed within the context of a broader UK food strategy.

An agri-food trade strategy should be a catalyst for bringing together the interests and efforts of all relevant UK government departments across agri-food, trade and development.

We have concentrated, in particular, on the need to balance liberalisation with not undermining the UK’s world leading environmental and animal welfare standards. We recommend therefore that the UK government adopt an approach to imports which would align with its overall approach to trade liberalisation and seek to lower its tariffs and quotas to zero within trade agreements over a reasonable time period. This would be contingent on imports meeting the high standards of food production expected from UK producers. It would be dynamic, recognising the interplay between general trade policy, the provisions of specific free trade agreements and the success of UK advocacy for animal welfare, environmental and ethical standards in international fora. It would include safeguards against anti-competitive trade distortion. We recognise that this is an innovative proposal, but we have drawn inspiration from parallel provisions in the EU-UK Trade and Cooperation Agreement. Our proposal is less radical and may be less controversial with trading partners than it would have been just a few short months ago.

We know that we should be practical and recognise that the UK government is currently continuing negotiating a number of free trade agreements (FTAs) with countries such as the USA, Australia and New Zealand. There would be challenges resulting from changing this approach in the immediate short-term. Our recommendation is a strategic aspiration for UK trade policy in the medium and longer term.

Second, our vision requires strong international leadership by the UK. This is a particular imperative in terms of action to resolve the climate crisis. For global trade to flourish in the future, it must be made more sustainable and resilient to external shocks. The UK must leverage international forums and work with international partners to raise climate and environmental standards. This requires clear commitment and meaningful action.

The UK needs to make the most of the opportunities for global leadership that 2021 provides. This year the UK takes centre stage in the G7, at COP26 and at COP15. At these forums the UK can show leadership in resolving the climate crisis and also on animal welfare issues, labour rights, ethical trading and countering antimicrobial resistance.

We give practical suggestions as to how this might be achieved. The approach of the UK in international forums should be bolder and less understated and we should deploy our best people in these settings. We should find opportunities for mutually beneficial solutions with developing countries. We should build support for a science-based approach and work within internationally agreed norms, while recognising where we need to challenge the status quo.

Third, the UK government should continue to strengthen its approach to the negotiation of free trade agreements (FTAs). We recognise the unprecedented pace with which our UK negotiating teams have delivered new and continuity trade agreements. We identified some positive practice included in the EU-UK Trade and Cooperation Agreement that should inform our ambitions for FTAs with other trading partners. In doing so we haven’t underestimated the challenges of reaching progressive trade agreements, and we don’t intend to bind the hands of our negotiators unnecessarily.

The UK government needs to continue its work to develop effective approaches to scrutiny and analysis of FTAs. Impact assessments should include qualitative analysis of impacts where quantitative measures are lacking, including in relation to the environment and animal welfare. Mandates for FTAs should reflect broad-based consultation and engagement, including with devolved administrations. We need to strengthen processes for risk-based audit, assurance and certification.

Fourth, the UK government should put more energy and resource into export promotion, market access and marketing. These are critical pre-requisites for growing UK agri-food exports beyond the negotiation of trade agreements.

We know that the UK’s food ‘offer’ is one of quality, traceability, heritage, safety and high environmental and welfare standards. A new, ramped up approach to exporting should identify systematically the UK’s domestic offer and opportunities overseas and target resources accordingly. It should leverage the UK government’s overseas network to attract interest in UK agri-food technology.

Government can use its political leverage to open doors; businesses can build the supply chains and networks to trade. Collaboration between government and industry, across the whole of the UK, will allow us to maximise each opportunity for our agri-food sector to export. Our ambition should be to make our collective impact greater than the sum of what might be achieved separately.

Fifth, the UK government should align its trade, aid and climate policies relating to agri-food. These policies must work together to strengthen our relationships with developing countries over time, to diversify our food supply, support our food security goals and support the economic prosperity of those nations. In reviewing these policies the UK government should draw on structured engagement with governments, agri-food businesses and charities in developing countries and agri-food businesses in the UK with developing country interests.

In summary, UK trade policy must be ambitious and the agreements that are negotiated need to tackle the issues of the next generation, not just this one. Our focus must be on long-term gains, not short-term expediency. Both government and business need to adapt, learning the lessons from the COVID-19 pandemic and reflecting the generational shift in the priorities of consumers.

We don’t have the time to delay these changes. We have proposed clear principles to guide the UK government that will allow the UK to move forward confidently with a clear, well executed strategy. This should be underpinned by a commitment to a fair and safe food and farming system for all, with no race to the bottom or backsliding on standards. There should also be strong ambition for the UK to play a leading role in international agricultural and food issues and a positive economic impact where everyone feels the benefit of trade.

We see opportunities for all and are optimistic about the future for the UK as an independent trading nation.

Recommendations

Recommendation 1:

The UK government should develop a bold, ambitious agri-food trade strategy. This would enable a coherent approach to the sector across the UK government and the devolved administrations and provide a framework of priorities for future trade negotiations. It should be based on a liberalising approach to trade policy, focused on bringing new opportunities for UK business, tempered with safeguarding of important standards. It should be framed well in the context of a broader UK food strategy.

Recommendation 2:

There should be a minister with specific responsibility to lead on agri-food trade, who would ensure policy coherence across UK government. The minister would lead in pushing for an elevation of global standards on environment, animal welfare and ethical trade in international forums.

Recommendation 3:

Climate change and other environmental pressures are of such paramount importance that the UK government must ensure that they are integral to its trade policy and negotiations. It should promote these issues in international forums, especially COP26. It should champion the creation of a global standards framework for the environment and clear metrics for measuring environmental sustainability, whilst establishing a corresponding set of rigorous national standards. WWF’s Codex Planetarius could be a model from which to build these ambitions.

Recommendation 4:

The UK should draw on its strengths in animal welfare to show world leadership in embedding it into trade policy. The UK government should play a leadership role in international forums, to raise worldwide standards of animal welfare. It should do this by investing in expert facilities and experts who can provide independent advice to government. It should then build international relationships and put forward proposals that are carefully crafted, convincing and evidence based.

Recommendation 5:

It is important to combat antimicrobial resistance (AMR) in compliance with the WHO Global Action Plan. The UK government should apply the approach taken in the EU-UK Cooperation Agreement, in all future trade negotiations. It should also adopt a strong stance on AMR in multilateral forums and at the UN Food Systems Summit later in 2021.

Recommendation 6:

The UK government should respond to the noticeable shift in public attitudes to ethical trading and set out its ambitions for the agri-food sector, to be an exemplar for other sectors. It should conduct an assessment of enforcement practices overseas, to give a regular scorecard performance on exporting countries. It should seek to include a labour chapter and Corporate Social Responsibility (CSR) provisions in all FTAs. Finally, it should ensure that the UK is leading by example domestically. This will involve enhancing support for the UK Gangmasters and Labour Abuse Authority. It also means calling on UK industry to ensure fair wages and conditions are being provided for seasonal workers.

Recommendation 7:

The UK government should seek to build global coalitions to promote and protect labour rights of workers in key supply chains. Our research suggests the UK might focus first on supply chains for bananas, rice, cocoa, coffee and tea. It should work within the International Labour Organisation (ILO), as a founding member, to push for the 8 ILO fundamental Conventions to become an assessment of performance on labour rights linked to trade, rather than a registration exercise.

Recommendation 8:

The UK government should take an ambitious approach to the liberalisation of the UK’s import tariff regime, for countries that can meet the high standards of food production expected from UK producers. It should work with trading partners within future FTA negotiations to lower tariffs and quotas to zero where equivalence is demonstrated for these standards. These standards must be aligned with core global standards, and the UK government should take an active role in strengthening standards via international forums.

Recommendation 9:

The UK government should strengthen impact assessment of trade policies and agreements by improving qualitative assessment on health, welfare, biosecurity and environment. Modelling in assessments should go beyond trade flows and address wider consequences such as impact on UK food prices. Assessment of trade deals with developing countries should assess growth and development of the partner country, as well as the UK.

Recommendation 10:

The UK government should ensure consultation and engagement on FTAs, from the early stages of inception of a prospective agreement and throughout negotiations, is transparent, thorough, and more detailed than it is currently, whilst recognising the need for confidentiality.

Recommendation 11:

To ensure that future trade policy incentivises and builds trust with trading partners, the UK government should implement a robust, risk-based audit, assurance and certification process. This could include an end-to-end Trusted Trader network to ease border checks from authorities in exporting countries on sealed loads. The UK should fully explore the use of SMART as well as recent technology such as blockchain to further reduce friction points at the border and along the whole supply chain. Future agri-food risk assessments should be conducted in a transparent way, that includes publishing the findings, at a commodity and country level.

Recommendation 12:

The UK government should work with the industry to increase investment in knowledge and insight of overseas markets. It should conduct systematic mapping of the sector’s competitive advantages. It should review how it might encourage inward investment that would helpfully expand the UK’s trading capacity. Particular focus should be placed on opportunities for agri-food focused small and medium enterprises (SMEs).

Recommendation 13:

The UK government should support and participate in a new Food and Drink Export Council, which would bring together industry and government export leads for England, Northern Ireland, Scotland and Wales, with a rotating chair. The Council would enable UK-wide collaboration, sharing of knowledge and resources, support exporters and market access negotiations, and maximise the benefits of working together whilst respecting the separate approaches in different parts of the UK.

Recommendation 14:

The UK government should work with the Food and Drink Sector Council on the industry’s request for a specialist agri-food export body for England. This would provide one-stop-shop trade information, to give it the best chance of success. Government should provide related, additional funding for existing national food and drink export organisations.

Recommendation 15:

The UK government should escalate the pace of efforts to remove market access barriers, through FTA negotiations and wider diplomacy. It should work with the agri-food sector to determine whether the UK Export Certification Partnership (UKECP), which contributes to market access and maintenance negotiations, should be given a wider remit, for poultry, fresh produce and cereals.

Recommendation 16:

The UK government should rapidly increase its overseas resourcing, by expanding its network of agri-food experts based in embassies in target markets. These experts would form part of the network of trade staff reporting to Her Majesty’s Trade Commissioners. This should be done in collaboration with, and supported by, key sector organisations. These experts should focus on market access and opening up trade opportunities.

Recommendation 17:

The UK government should review marketing and promotional activities for agri-food exports, particularly under the banner of the GREAT campaign. It should place a greater focus on developing campaigns sensitive to the needs of UK nations and regions and promoting goods relevant to specific overseas markets. This could be done through the proposed new Export Council in collaboration with the Devolved Administrations.

Recommendation 18:

The UK government should review the current public procurement plan for food. In addition to achieving value for money and meeting nutritional requirements, it should maximise the opportunity to source from the UK, source sustainably and improve the transparency of the sourcing process.

Recommendation 19:

The UK government and the food industry must work together to improve country of origin information in the loose food, food service and out of home supply chains. This will respond to consumer appetite for more trust and transparency in those supply chains. This should form part of a broader agenda to support these supply chains as the country recovers from the COVID-19 pandemic.

Recommendation 20:

The UK government should conduct structured engagement with governments, agri-food businesses and charities in developing countries and agri-food businesses in the UK with developing country interests. It should draw on this engagement to facilitate the building of relationships and enhanced understanding of where UK investment would have the most positive impact. It should also underpin closer collaboration between the Foreign, Commonwealth and Development Office (FCDO), DIT and Defra on agri-food trade policy, regulation and other activity.

Recommendation 21:

The UK government should align its trade, aid and climate policies relating to agri-food. Teams across government should establish clear, specific programmes to ensure that they are cooperating on this and aligning budgets and priorities. Particular support should be provided to smaller businesses and poorer producers. It should help them to improve climate resilience. It should help them to meet standards in export markets so they can better access the benefits of global trade. It should also be targeted towards helping them shift into the ‘added value’ space of processing and packaging their own raw commodities, which will create lasting economic growth.

Recommendation 22:

The UK government should adopt a bolder, more confident and less understated approach to working with like-minded countries or in pluri- or multilateral discussions. It should apply this to influencing necessary reforms to the international rules for trade and standards. These objectives should be embedded in a common strategy so that they can be pursued in all relevant multilateral negotiations and forums. The international activities of non-governmental organisations (NGOs) should be recognised and supported where there is common cause.

Read the final Report of the Trade and Agriculture Commission (PDF, 9,135KB)