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ECIPE Policy Brief No. 7/2018
European Centre for International Political Economy (ECIPE), Brussels
There are few issues that causemore controversy in internationaltrade policy than agriculture. TheEU’s overall agriculture policy, includingdomestic support, tariffs,and Tariff Rate Quotas (TRQs),are an ongoing irritant with tradepartners. The UK government hasspoken of being more liberal.This is the context for the UK’sfirst international trade negotiationsince the Brexit vote, to set our futureWTO schedules, including calculatingour TRQs. There has beenoptimistic talk from UK Ministersand influential advisers about UKleadership helping renew the impetusfor trade liberalisation at theWTO. This process could thereforebe an opportunity for the UK toshow a liberalising instinct, and asensitivity towards the differing interestsof different countries.So far the UK is struggling. Theproposed approach to assert anew schedule, calculated on thebasis of average historical usageof the previous EU TRQs, is seenby agricultural exporters as counterto WTO rules as they would suffera loss of market access fromthe loss of flexibility, and failureto account for produce currentlycrossing borders once inside theEU. Given that all countries haveto certify the schedule, a full negotiationwill be needed. The EU,who joined the UK in proposingthis approach, have now acceptedthis need. The UK governmenthas sent mixed signals regardingfollowing this lead, but we expectthey will need to do so shortly.The UK needs to find a new moreliberal approach in line with Governmentpolicy. The UK WithdrawalAgreement may provide a periodof time during which unfetteredtrade with the EU will continue,which should allow continuing singlemanagement of the existingTRQs in the short term. The UKshould use this extra time to runa domestic consultation processwith a Green Paper on agricultureand trade, aiming at an outcomethat will deliver liberalisation alongsideclarity and reassurance fordomestic interests. The evidencesuggests that such an outcome isattainable.In the event that the UK leaves theEU without a deal in March 2019the UK’s current approach willalso not work, given the existingtrade between the two, and woulddefinitely require a significant renegotiationby both EU and UKafter a short term solution was putin place. Thus the case for the UKtaking a fresh look at splitting TariffRate Quotas would seem to beoverwhelming. It should be fine toadmit that the initial approach wasoptimistic, and that having nowconsidered further we are going todeliver something better.
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