The withdrawal of the United Kingdom from the EU
Following the United Kingdom’s departure from the European Union on 31 January 2020, a transition period entered into force, lasting until 31 December 2020.
At the end of the transition period, 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 may no longer be considered of EU origin when exporting under those agreements.
The European Commission maintains a webpage with up-to-date information on preparing for the end of the transition period, including:
Communication and checklist
Getting ready for changes
Sector-specific guidance notices
The UK and the EU share an important agri-food trading relationship.
EU countries export large volumes of agri-food products to the UK, notably fresh and processed fruit and vegetables, meat products, and food preparations. In 2019, the value of these exports came to €41 billion.
In 2019, a significant share of the UK agri-food imports came from the EU (74%), Dairy products, food preparations and meat products accounted for the highest share of agri-food products that the UK imported from the EU (as % of total UK agri-food imports).
It is important for stakeholders to assess how the new relationship between the United Kingdom and the EU will impact their production and trading practices.
The EU is prepared for such impacts through the common market organisation (CMO), 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 Russian import ban of 2014-16, 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 EU countries.
Import and export licences
As of the end of the transition period, European Union rules on the system of import and export licenses will no longer apply to the United Kingdom.
The most significant rules in this regard are Commission delegated regulation (EU) 2016/1237 and Commission implementing regulation (EU) 2016/1239, which set up a system of import and export licenses for a number of products.
As a result of this change, rights and obligations deriving from import and export licences issued by the European Union will expire in the United Kingdom as of the end of the transition period. Similarly, rights and obligations deriving from import and export licences issued by the licensing authorities of the United Kingdom will expire in the European Union.
There will, however, be an exception for licences issued in the framework of WTO tariff rate quotas.
WTO tariff rate quotas
To prepare for the withdrawal of the United Kingdom, the UK and EU have followed the appropriate WTO procedures to establish their respective quantitative commitments, to be applied from the end of the transition period. Most notably, 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 General Agreement on Tariffs and Trade (GATT), 1994. The apportionment of the tariff quotas is implemented by Regulation (EU) 2019/386 (as amended by Regulation (EU) 2020/2099) and affects the validity of import licenses issued before the date of the 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 of 1st January 2021.
- Licences issued by EU countries other than the United Kingdom: Rights and obligations deriving from import licences issued and import rights allocated by the license-issuing authorities of EU countries 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 of 1st January 2021.
- Apportionment of WTO tariff rate quotas: the European Commission has published a table covering the apportionment of tariff rate quotas for certain agricultural products included in the WTO schedule of the Union.
To avoid potential disruption of traditional trade flows between outermost regions and the UK after the ending of the transition period, 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.