Digging in to the Trade and Agriculture Commission report

On 2 March 2021 the Trade and Agriculture Commission, led by former chief executive of the Food Standards Agency Tim Smith, published its much-anticipated report into trade and agriculture in the UK. 

Released in the shadow of the Chancellor's Budget, and weighing in at a mighty 140 pages, you might not have had a chance to read the report, so we thought we’d look at it in some detail for you.

The Trade and Agriculture Commission report sets out a vision for trade with six principles, and lays out five themes that cover 22 recommendations. The six principles are: developing an agri-food trade strategy; international leadership; managing free trade negotiations; expanding export opportunities; and aligning trade, aid and climate policies in relation to agri-food.  

Reasons to be cheerful 

In our view, the Trade and Agriculture Commission report has a lot to recommend it. It confirms the view that current food standards can be maintained AND be World Trade Organisation compliant; it calls for a set of national environmental standards that imports must meet while also recommending the UK Government champion a new set of global standards and metrics; it is clear on the need to protect animal welfare and for the UK to lead on climate. 

It makes a specific recommendation to combat antimicrobial resistance and the misuse of farm antibiotics, pointing to the need to work globally on this. 

The report also acknowledges the concerns of consumers about food standards and rejects the idea that household food insecurity in the UK can be resolved by cheap, low standard food imports. It calls for trade assessments to cover the impact not just on the UK but also developing nations, for more trade transparency and scrutiny, and a minister dedicated to agri-food trade.  

Food standards and dual tariffs 

As chair of the Commission, Tim Smith was at pains to stress that there would be no ‘backsliding’ on standards:

“Meanwhile we are trying to safeguard important standards in a way that is not protectionist or trade distorting. It is a path that 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 was a welcome emphasis from the Chair and a marked shift from his initial stance that concerns about the impact of trade on UK food standards were "alarmist”.  

The recommendation to balance trade liberalisation with maintaining food standards provoked a lot of reaction from farmers, NGOs and consumer organisations. The report recommends the UK lowers tariffs and quotas where partners can demonstrate ‘equivalence’ to the standards required for UK producers. This echoes the call for a ‘dual tariff’ approach made in the first part of the National Food Strategy. However, the TAC recommendations follows up with “these standards must be aligned with core global standards”.  

As Kath Dalmeny, Chief Executive of Sustain, in her capacity as Chair of the Future British Standards Coalition commented:

“In many cases global standards are lower than the UK's. Big questions remain over who would decide what was equivalent, and how. We have been clear that tariffs are no substitute for clear blanket bans and that tariffs could be easily reduced or phased out over time, thus breaking the government's promise of 'no compromise' on food standards.” 

This concern was echoed by Vicki Hird, Head of Sustainable Farming at Sustain, who pointed out that the TAC was brought into being on the back of a wave of public protest:

“More than 2.6 million people signed petitions to protect food standards, such as bans on certain pesticides and use of hormones, and they will want clarity about whether the food on their plate is produced to the environmental and animal welfare standards they expect. We need clear red lines maintained. If not, further public opposition to low standard imports is likely and UK farmers will soon be undermined by more low standard imports." 

Concern on this point was also expressed by Sue Davies from the consumers' association Which? who said that consumers are "not prepared to sacrifice high food standards and do not want a two-tier system where only those who are wealthier can be assured that the food on their table meets the standards that consumers currently expect”. 

Questions also remain over what might happen to domestic standards if we concede that food made to lower standards can enter the country, albeit with a higher tariff. If allowed in, even in principle, domestic producers could argue their case for producing to those lower standards.  

Labour standards 

The TAC report recommended that the UK Government, as a founding member of the International Labour Organisation (ILO), should use the conventions to assess the labour rights in supply chains and should seek to build global coalitions to protect the rights of workers. It singled out supply chains for bananas, rice, cocoa, coffee and tea as a good place to start.

The report also points to measures to bolster domestic labour standards including enhancing support for the UK Gangmasters and Labour Abuse Authority and calling on UK industry to ensure fair wages and conditions are being provided for seasonal workers. 

The power of procurement 

There were other points in the report which got less coverage, such as the call for public sector food and drink procurement (food for schools, hospitals and in other public services and institutions, paid for with public money) to be reviewed and appropriately aligned with broader government policy goals.   

The Commission expressed regret that the Government had not updated its statistic about the net worth of public procurement being £2.4bn a year. It also highlighted the fact that the UK is now (as of January 2021) part of the WTO Government Procurement Agreement which means it needs to treat foreign suppliers in ‘no less favourable’ terms to domestic ones.

Nonetheless, they said food procurement should be done sustainably and transparently and be about not just value for money, but also nutrition and sourcing from UK producers.

Where is human health?  

In his opening remarks, TAC Chair Tim Smith said that helping people lead healthier lives was a key focus for him. The vision for trade the report laid out said the UK should seek food that was safe, healthy and affordable. However, the Chair made clear that the Secretary of State for International Trade Liz Truss had ruled food safety and human health and nutrition out of the TAC’s scope, on the grounds that responsibility for these rest with the Food Standards Agencies and the Department for Health and Social Care.   

The Chair expressed some frustration about this as he views trade, household food security, diet and nutrition as linked, both in terms of policy but also operational practicalities. 

So, we welcome that the report does call for a focus on nutrition in government food and drink procurement and also calls for trade impact assessments to cover health. (This latter point echoes the National Food Strategy recommendation).

However, given that the Government has deliberately written health out of the remit for the future statutory Trade and Agriculture Commission and has yet to fully explain who will conduct these impact assessments, what will they cover and how this will be co-ordinated with the work of the new TAC, we think the government has some work to do to provide reassurance that human health will not be left behind.  

Consumers, quality, price and household food insecurity 

The report found that consumers very much cared about their food standards and understood the vital role that trade policy plays in enforcing those standards on imports. But they wanted those baseline standards built in as they don’t have the time to analyse all products.

They found that in trade-offs with price, shoppers are often willing to pay a premium for higher ethical, welfare and environmental standards, particularly when verified by assurance schemes, and that this trend is consistent across socio-economic groups. This chimes with a Which? Survey conducted in 2020 which found that three-fifths of consumers rejected low standard food, even if labelled.   

During last year’s Agriculture Bill debates, the argument was advanced that food regulations were unnecessary on the basis that consumers could simply opt to avoid buying low standard produce, using labelling to inform that preference. Sustain and our members are clear that there are many outlets – specifically schools, hospitals and care homes – where food is unlabelled and choice is not available. Further, many of the issues that people are concerned about - such as antibiotic use - do not appear on food labels. We therefore welcome the TAC report’s acknowledgement that "labelling is not a substitute for having and enforcing standards".   

The TAC report also found that consumers rejected the idea of lowering trade barriers and standards in order to tackle rising food insecurity. Their research showed that consumers felt this wasn’t a “sensible solution” to the problem, because it could lead to the poorest in society only having access to food which may not meet domestic standards. So, the report found that, with UK shoppers paying comparatively less for food, "trade policy may have limited incremental impact on [household] food insecurity and poverty, and it is for domestic policy to address the core issue of [household] food insecurity.” 

Developing nations

The TAC report makes welcome reference to the UK adopting a an approach similar to the EU's Generalised Scheme of Preferences which lowers or eliminates tariffs for eligible businesses in developing nations, in order to help them gain access to the wealthy UK market. It also recommends that UK assessments of trade measure the impact on the developing nation partners as well as the UK, which is also welcome.

However, we would caution against assumptions about developing nations having low standards and needing support to reach high UK standards. The Future British Standards Coalition (chaired by Sustain Chief Executive Kath Dalmeny) heard evidence that developing nations are already meeting high standards, and that setting a high bar (for example on pesticide use) can be of direct benefit to producers in developing countries.

We note with concern that the UK rollover discussions with Ghana at the end of 2020 led to tariffs being put on banana imports and that the UK was accused of trying to bully Ghana  into a deal that might have soured relations with its African neighbours. We hope that the Commission's report will encourage the UK government to avoid a similar situation arising.

Winners and losers 

The numerous recommendations aimed at easing friction and boosting trade will no doubt be welcomed by farmers and food producers. They recommend that the Government develops: a trusted trader scheme; increased knowledge of markets and boosted investment for SMEs in agri-food; a multi UK-nation Food and Drink Export Council; an escalation in pace to remove market access barriers; a network of agri-food experts in embassies in target markets; and a review of UK Government marketing campaigns. 

However, the report is candid that not everyone will weather the changes ahead. This was acknowledged by the National Farmers Union in its response from NFU President Minette Batters, who said the balance of trade and standards "will involve trade-offs and difficult decisions and that there will be winners and losers as the government pursues its new, independent trade policy.” 

Next steps 

The Government should now respond to the TAC report and we await their response with interest. It is worth bearing in mind that this Trade and Agriculture Commission is advisory only, so the Government is not obliged to take its recommendations forward. But will it acknowledge the concerns of consumers and launch a process to agree on the core standards that imports to the British market must meet? Will it ensure that there is scope within that for future improvements to standards? Will it make any announcements about the timetable for and appointments to the future statutory Trade and Agriculture Commission? We welcomed the shift made by the Government to widen the membership of the TAC to include experts on the environment and animal welfare, but still believe health and consumers have been left out.  

We will also continue to monitor the Department for International Trade for emerging trade policy that would affect food, farming, the environment, animal welfare and human health, such as the removal of tariffs on cane sugar and stated intention to remove tariffs on biscuits. We have been working with the London School of Economics to investigate the potential impact of trade on child health, including the new report Trick or Trade? We will also monitor any developments on free trade agreements – although without transparent processes, this is admittedly quite hard.  

Finally, we await round two of the National Food Strategy, which we expect to have much more to say on public health.