EU agriculture and Brexit
On 11 April 2019, the European Council (Article 50) decided, in agreement with the United Kingdom, to extend further the two-year period provided for by article 50(3) of the Treaty on the European Union, until 31 October 2019. Following this decision, and until further notice, any reference in the documents published on this page to 30 March 2019 at 00:00 (CET) or 13 April 2019 at 00:00 (CET) as the withdrawal date of the United Kingdom from the European Union, must be read as referring to 1 November 2019 at 00:00 (CET). Please note that
- in the event that the United Kingdom has not held elections to the European Parliament in accordance with applicable Union law and has not ratified the Withdrawal Agreement by 22 May 2019, the Decision referred to above shall cease to apply on 31 May 2019, and the withdrawal will therefore take place on 1 June 2019
- should the United Kingdom ratify the Withdrawal Agreement at any stage before 31 October 2019, the withdrawal will take place on the first day of the month following the completion of the ratification procedures.
Work to prepare for the withdrawal of the UK has been ongoing. The EU remains focused on protecting the agriculture and farming interests of EU citizens.
An ad hoc meeting, "Stock taking of civil dialogue groups", gathering all organisations represented in the civil dialogue groups, as well as each of their chairpersons, was convened on 1 February 2019 to present and discuss issues relevant for the agri-food sector concerning Brexit preparedness and contingency.
Agenda of the "Stock taking of civil dialogue group"
Brexit and the agri-food sector – presentation at the "Stock taking of civil dialogue group"
Other civil dialogue groups meetings organised by DG AGRI
Brexit has been on the agenda of many civil dialogue groups meetings with stakeholders over the past year. More recently, Brexit was and will be discussed at the following meetings
Milk – 22 February 2019
Meat market observatory – 22 February 2019
Arable crops – 1 March 2019
Spirits – 15 March 2019
Beef – 26 March 2019
Quality and promotion – 28 March 2019
Milk market observatory – 29 March 2019
Crops market observatory – 3 April 2019
Fruit and Vegetables – 5 April 2019
International aspects of agriculture – 9 April 2019
Sugar – 12 April 2019
EU-27 is a very important exporter of agri-food products to the UK (€40 billion in 2017). As from the date of Brexit, the UK would become overnight the main agri-food trade partner of the EU, both in terms of exports and of imports. EU member states export significant volumes of agri-food products to the UK, notably fresh and processed fruit and vegetables, meat products, and food preparations.
A significant percentage of UK agri-food imports come from the EU (73%), with dairy products, food preparations and meat products the most pronounced EU agri-food products as a share of total UK agri-food imports. Of the UK agri-food imports from the EU, the main provenances are the Netherlands (14%), Germany (11%), Ireland (10%) and France (10%).
UK exports and imports of agri-food products from third countries benefitted until now from the terms negotiated by the Union with its trade partners (EU international agreements). When the UK is no longer a Member State, it will no longer be part of these agreements. The implications will differ whether the UK leaves in an orderly or disorderly manner:
- in case the withdrawal agreement is concluded, it will provide for a transition period, during which the UK is bound by the obligations from all EU international agreements (as EU international agreements are part of the EU acquis). This guarantees integrity and homogeneity of the single market and the customs union. The EU will notify its international partners that the UK is a member state for the purpose of international agreements, including agreements that enter into force during the transition period.
- in a no deal scenario, international agreements concluded by the EU will no longer apply to the UK. Free trade agreement provisions remain unaltered for the EU (e.g. market access, tariff rate quotas) and EU traders need to check rules of origin as UK ingredients will no longer be considered EU origin. Only a future EU-UK agreement could change some modalities regarding bilateral agreements.
Preparing for Brexit
Work to prepare for the withdrawal of the United Kingdom has been ongoing in parallel with the negotiations. More information can be found on the dedicated website for Brexit preparedness.
Regarding agriculture, a notice to stakeholders was issued on 1 February 2018 on EU food law covering food labelling, food ingredients, requirements for food business operators, food production rules, and organic production.
For agriculture, the impact of a no deal would mainly consist in the levying of tariffs on EU products, imported into the UK, which are currently intra-EU sales. This may lead to disturbances of certain markets, and impact Member States at different degrees.
The common market organisation (CMO) is a set of rules that regulates agricultural markets in the EU. The CMO encompasses legal tools in the event of market disturbances, acting as safety nets, such as public intervention, private storage, crisis prevention and risk management, as well as adopting exceptional market measures.
The European Commission is experienced with implementing such measures at times of market disturbances, such as during the 2014-16 period, with the use of measures to address market imbalance (private storage aid, promotion programmes), measures to help farmers in short term cash flow difficulties (targeted aid, advanced payments), state aids, and incentives to reduce production.
State aids regimes can also be solicited to cater for the most damaging effects of a no deal scenario in certain Member States.
Import and export licences
Subject to the transition period provided for in the draft withdrawal agreement, as of the date of withdrawal of the United Kingdom from the European Union, the Union rules on the system of import and export licenses, and in particular Commission delegated regulation (EU) 2016/1237 and Commission implementing regulation (EU) 2016/1239, which set up a system of licenses for the import or export of a quantity of products covered by a licence, will no longer apply to and in the United Kingdom. This has in particular the following consequences (with the exception of licences issued in the framework of WTO tariff rate quotas, for which implications are provided below):
- Rights and obligations deriving from import and export licences issued and import rights allocated by the licensing issuing authorities of the United Kingdom expire in the European Union on the date of withdrawal of the United Kingdom from the European Union
- Rights and obligations deriving from export and import licences issued and import rights allocated before the date of withdrawal of the United Kingdom from the European Union by the license issuing authorities of Member States other than the United Kingdom remain valid in the European Union
WTO tariff rate quotas
To prepare for the withdrawal of the United Kingdom, the UK and EU are following the appropriate WTO procedures to establish their respective quantitative commitments. Most notably the tariff rate quotas (TRQs) will require certain adjustments to reflect the withdrawal of the United Kingdom from the Union. For the EU’s WTO tariff rate quotas, the EU and the UK envisage an apportionment based on historic trade flows.
As part of the preparedness exercise for the United Kingdom's withdrawal from the European Union, Regulation (EU) 2019/216 provides a basis for the apportionment of tariff rate quotas included in the schedule of concessions and commitments of the Union annexed to the GATT 1994. The apportionment of the tariff quotas will be implemented by Regulation (EU) 2019/386 and affect the validity of import licenses issued before the date of United Kingdom's withdrawal from the European Union, as follows:
Licences issued by the United Kingdom: Pursuant to article 2(1) of Commission implementing regulation (EU) 2019/386, rights and obligations deriving from import licences issued and import rights allocated by the license issuing authorities of the United Kingdom under the tariff rate quotas included in the WTO schedule of the Union are no longer valid in the European Union as soon as article 1(2) of Regulation (EU) 2019/216 applies.
Licences issued by Member States other than the United Kingdom: Rights and obligations deriving from import licences issued and import rights allocated by the license issuing authorities of member states other than the United Kingdom remain valid in the Union with the exception of licences transferred to operators established in the United Kingdom, which are no longer valid as soon as article 1(2) of Regulation (EU) 2019/216 applies.
Apportionment of WTO tariff rate quotas: the quantities that are available following the apportionment of those tariff rate quotas shall be published hereunder, as soon as possible and at latest within two working days from the day from which article 1(2) of Regulation (EU) 2019/216 applies.
To avoid potential disruption of traditional trade flows between outermost regions and the UK after the withdrawal of the UK from the European Union, the volumes of processed agricultural products currently sent from the outermost regions to the UK as an EU member will be considered as exports to third countries. At the same time, the United Kingdom has been added to the list of third countries to which the processed products may be re-exported from the Azores and Madeira in the context of regional trade.
Regulation (EU) 2019/260 as regards the volumes of traditional trade flows between certain outermost regions of the Union and the United Kingdom.