It pays to read the small print
Talks of deals and no deals rumble on and the UK Government continues to pursue its ‘cake and eat it’ agenda of securing a zero for zero deal but without any of the other inconveniences; access to the Golf Club not only without being a Member but not even paying the green fees. And who can blame them? I think we all hope they succeed. But as I have said many times, this will come at a price.
A core element of the UK’s justification for a ‘simple’ deal is that others have secured these with the EU without strings attached. Based on these precedents, the UK should be accorded the same terms. Of course, the reality is that the UK wants a deal that goes well beyond the limited provisions of the Canada (CETA) deal or the Japan (EPA) deal with no tariffs or quotas and full access for services. The EU’s response is that this comes with strings attached; strings the UK can’t agree to. The risk then is that we end up with a bare bones deal which does not overcome the transactional complexity of border checks and SPS compliance and it is this last point that I want to highlight with a few key examples.
On Monday 21 September the full suite of model ‘Harmonised EU Export’ Health Certificates (EHCs) was made available online. For those who have not yet you can read it here.
These are the EHCs exporters will have to use if they want, among other things, to export meat and meat products to the EU. What they reveal is that the conditions that may be imposed in order to export to the EU may not be those that the UK currently enjoyed as an EU Member State and which have persisted during the Transition Period (TP). Some conditions in these EHCs may or may not apply depending on the health status the UK is accorded as and when it is formally listed by the EU as a Third Country and approved thereby to export products of animal origin to the EU. This may be viewed by some as a formality but, as we have learned recently, it isn’t.
A core element of the UK’s justification for a ‘simple’ deal is that others have secured these with the EU without strings attached
For those who may be tempted to point out that this ‘listing’ has already happened twice in the previous ‘no deal’ cliff edge scenarios, I would point out that on those occasions, not only did the UK have a seat at the table at the Standing Committee on Plants, Animals, Food and Feed (SCOPAFF) which it ceased to have when we left the EU at the end of January 2020, but also on those occasions our 3rd country approval was linked to agreeing 9 month of dynamic regulatory alignment. On 1/1/21, while our regulations may be aligned by default, there is no formal commitment from the UK to do so as we take back full control.
So what might this mean? Well, let’s take two simple examples straight from the EHCs currently online. You can do this at home.
The first is EHC 8216 – the EHC for beef exports where one of the conditions may be that all livestock will be required to have had a negative TB test within 3 months of slaughter. Whether this requirement persists will depend on the status the EU grants the UK but if it remains a requirement, and it is virtually impossible to deliver under the UK’s current testing regime, vast numbers of cattle would be ineligible for export. In effect exports would be close to impossible.
The second is EHC 8260 – the EHC for pork exports. Currently the UK has a derogation which allows it to sell fresh pork in the EU without having to carry out comprehensive Trichinella testing. In order to avoid having to do so at the end of the TP the UK will have to be recognised as being Trichinella free and as having ‘controlled housing’ status. UK was not able to get this recognition when the Trichinella regulation was updated in 2015 and it is likely that this requirement will now have to be met will all operators having to comprehensively test or freeze with all of the additional costs involved.
Before I get accused of being a Jeremiah, I readily concede that the UK may be able to maintain its current health status but these examples demonstrate that unless we get the details and small print right our capacity to export and export competitively will not be solved by a trade deal alone.