How to trade food between countries has been the lifetime’s work of Elsa Fairbanks. She’s worked on exporting food from the UK for all her career and is now a director of Food and Drink Exportese Ltd. It’s an issue that is exercising Britain’s food and drink producers as the UK prepares to leave the European Union but what is involved is relevant to any producers in one country wanting to export to another. I chatted to her about this and the various tariff and non-tarriff barriers, especially for the UK as it leaves the EU – not to mention who will be working in the food and farming sector. Listen on!
The table blow summaries the process any producer needs to go through to export foodstuffs to the USA which Elsa mentioned in her interview. The basic procedure is:
|Copy of FDA Facility Registration Form 3537 for each Facility|
|Copy of Producer Food Safety Plan or equivalent for each Food line item in English with facility production floor plan and food production flow charts|
|Copy of Resume of Food Safety personnel at the Facility in English|
|Copy of Label to be affixed on to each Food line item in English. [FDA has adopted a new label format required to be adopted by July 26, 2019. However, Producers with less than $10 million in annual worldwide food sales will have an additional year to comply (ie by July 26, 2020) and Producers with less than 10 FTEE are exempt].|
|Food Specification and list of ingredients for each Food line item in English|
|Schedule of Food Sampling and Facility Audits Conducted for each Facility over the last three years together with a copy of the last sampling and audit reports|
|Schedule of recalls, import alerts or warning letters issued for each Food line item over the last 10 years together with a copy of the last recall, alert or warning letter issued in last year|
There’s another set of rules on disclosure of origin that also matter greatly when countries negotiate free trade deals. These were highlighted by the UK Food and Drink Federation and the National Association of British and Irish Flour Millers (NABIM) in a report they commissioned from Global Counsel recently called ‘Rules of origin in an EU-UK FTA: A ‘hidden hard Brexit’ for food and drink exporters?’.
Rules of origin exist to ensure that when two or more WTO members agree a Free Trade Agreement (FTA), preferential tariffs are not abused by importers shipping goods produced in other markets through one of the signatories of the FTA in order to avoid payment of tariffs. According to Ian Wright CBE, Director General of the Food and Drink Federation, “Rules of origin are a big piece of the Brexit puzzle for the food and drink industry. If we fail to secure sufficiently generous rules as part of a preferential trade agreement with the EU, food and drink manufacturers will be the ones who suffer this hidden hard Brexit. They could be facing an increase in exporting costs, or a complete ban of entry to the market.”
For example, notes the FDF, UK chocolate producers that export £530m of products each year to the EU could face tariffs of 27 per cent or more depending on the value of UK refined cane sugar originating from the world’s poorest countries and the volume of Irish milk in their products.
“Flour millers in the UK source 80 per cent of their wheat from the UK, but also use grain from Canada, the USA and other European countries to make a range of flours with different baking qualities” according to Alex Waugh, Director General of the National Association of British and Irish Flour Millers. “If the rules of origin adopted in many of the EU’s trade agreements were to apply in a trade deal between the EU 27 and the UK, flour milled with even a small proportion of these grains, and many foodstuffs made from it, would no longer be considered ‘of UK origin’ and would therefore be subject to very significant duties. This would add, for example, €0.10 to the cost of a loaf in Ireland, which is mainly supplied with flour from the UK.”
The report looks in detail at how 5 products – wholemeal bread, rice and corn cakes, a milk chocolate bar, chicken curry ready meal and frozen pizza margherita – would fare under two existing different origin protocols and is well worth reading. The authors also suggest eight rules of origin provisions the UK could seek in a EU-UK origin framework.