Chicken, champagne and trade: UK-EU deal promising, but far from finished

The message we’ve had from our members and the wider business community is that the UK’s world leading sparkling wine is back on ice. But corks shouldn’t be popping quite yet, as there’s much yet to be done.

There will be debate over the trade-offs the government has made, but the commitment to reduce sanitary and phytosanitary (SPS) barriers for agricultural trade is a significant win that will be welcomed by many businesses, particularly in the food and drink sector.

The EU is the UK’s most significant trading partner for the sector, representing around 71% of imports and 57% exports. Complex documentary requirements and extensive border checks have led to countless delays and issues for food and drink businesses since Brexit, resulting in whole shipments being destroyed due to the short shelf-life of their goods.

We know of a haulier that recently had to destroy four containers of chicken being exported to the EU due to these issues, costing them £100,000. SMEs, in particular, have been discouraged from trading with the EU due to this complexity, with recent Food and Drink Federation figures showing exports to the continent down 34% since Brexit.

The importance of the commitment to secure an SPS deal to reduce this complexity cannot be overstated. Any agreement reducing friction, costs and delays is a huge boost for UK trade, with our analysis showing such a deal could add between £40bn to £60bn to the UK economy.

Similarly, the agreement linking emissions trading schemes and energy market cooperation will also be welcomed by businesses. It is significant that these deals could also smooth trade flows between Great Britain and Northern Ireland, reducing complexity for businesses across the UK.

We should, however, be mindful that, while today’s deal represents a significant political commitment to reducing trade barriers, there will now be negotiations over the coming months as to its exact legal implementation. There will be much more work for both sides, with youth mobility another significant area both have committed to working on, as well as recognition of professional qualifications.

After years of uncertainty and friction, today’s summit and deal represent a positive sign of greater UK-EU cooperation.

Businesses thrive on clarity, and progress in these talks - alongside agreements with India and the US - sends a strong signal that the UK is serious about open, rules-based global trade.

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Marco Forgione MCIEx is the Director General of the Chartered Institute of Export & International Trade

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