Agricultural trade arrangements with EU and non-EU countries

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In February 2017 UK Prime Minister Theresa May provided indications about what she would like to achieve through the Brexit process as set out in Figure 1.

Since then, the general election in June 2017 has changed the political landscape by reducing the Conservative government to a minority government, and has led to the development of a confidence and supply agreement with the Democratic Unionist Party (DUP) in order to secure a majority of parliamentary votes.

This article defines the current UK trade situation, highlights the current EU dependencies and identifies the opportunities for potential trade deals with countries outside the EU in relation to agricultural products.

Figure 1: Brexit negotiation themes

Withdrawal from the European Single Market and the European Union Customs Union, and then subsequently agreeing a comprehensive free trade arrangement (FTA) are likely to take much longer than the two-year transition period began on 29 March 2017 when Article 50 was triggered. Whilst the UK may negotiate a deal to enable free trade to continue, if this is impossible, the UK will revert to trading under World Trade Organisation rules, which would impose import tariffs and non-tariff barriers.



Figure 2 shows the imports and exports of agricultural products to and from the UK. It highlights several factors affecting trade. The carousel effect is when products such as cow beef are exported to the EU for processing when facilities are unavailable in the UK and then imported back to the UK once processed. Trans-shipment, or the Rotterdam effect, also affects trade reporting. This is because the Port of Rotterdam in the Netherlands is a significant location for offloading UK goods one ship onto another to go to another destination. This can distort reporting of the UK’s trading relationship with EU and non-EU countries. As it is not uncommon for over 75% of the trade to be with EU Member States this highlights the inter-relationships and dependencies which need to be either retained or replaced. Therefore, the UK will have to develop trade agreements with both EU and non-EU countries, which as speculated may include early deals with New Zealand, Canada and/or the United States of America.

Figure 2: UK agricultural imports and exports


The UK could impose import tariffs, which would lead to higher retail prices that could affect consumption. Consequently, the UK may consider removing tariffs or setting tariff rate quotas (TRQ) that would allow a specified quantity of an imported product at a reduced or zero tariff. The tariff would return to the standard rate once the specified quantity was reached.

Typical ad valorem (value-related) and fixed import tariffs applied by the EU to imported agricultural products

  • Beef and veal: These have an ad valorem tariff of 12.8%, plus a fixed tariff of €1,414–3,041/t, cut dependent. There are also tariffs on processed beef (€3,034/t), although most bovine offal is tariff free. The EU also has TRQs for imports of high-quality beef from several countries in North and South America, southern Africa and Australasia, up to a maximum of 118,000 t. In 2015, the UK imported about 16,000 t of beef from these countries.
  • Sheepmeat: Aside from the existing TRQs for sheepmeat with New Zealand and Australia, the ad valorem tariff is 12.8%, plus a fixed tariff of €902–3118/t, which is cut dependent. There is also a 12.8% ad valorem tariff on processed sheepmeat. Sheep and goat offal are tariff free. New Zealand retains 80% of the TRQ, at 228,254 t. Australia has a TRQ of 19,000 t.
  • Pigmeat: This has fixed tariffs of €172–1,494/t, cut dependent. Pig offal is tariff free.
  • Dairy products: Fixed tariffs for dairy products are based on total weight or weight of lactic matter in the product. Tariffs for butter imports are €1,896/t and the tariff for cheddar cheese is €1,671/t. There are preferential import quotas for products such as New Zealand butter and Swiss cheese.
  • Cereals and oilseeds: Some vegetable oils, broad beans and sweet lupins have ad valorem tariffs of up to 12.8%. Raw oilseeds and oilseed meals are tariff free.
    • Medium- to low-quality wheat has a fixed tariff of €12/t up to the TRQ for the specific country (excepting Ukraine, which can import up to 950,000 t tariff free). Over the TRQ, the tariff is €95/t.
    • High-quality wheat is currently tariff free. However, the import tariff is calculated from the global market price and the specification.
    • Barley has an import tariff of €16/t for the first 307,000 t from any country (except Ukraine, which can import 250,000 t tariff free). In addition, 51,000 t of malting barley can be imported at an €8/t tariff.
    • Oats have an €89/t import tariff.
    • For maize, 280,000 t can be imported under a TRQ, after which a variable formula tariff is applied. Ukraine can import up to 400,000 t tariff free.
  • Potatoes: Ad valorem tariffs for potatoes range from 4.5 to 17.6%, product dependent. There is a TRQ for fresh and new potatoes from Israel of up to 33,900 t of new potatoes.
  • Horticultural products: The ad valorem tariffs for horticultural products are below 20% and can vary seasonally. Processed fruit and vegetable products are also subject to ad valorem import tariffs of between 12 and 17.6%.



In addition to import tariffs, non-tariff trade barriers can limit trade in agricultural products. Non-tariff trade barriers include sanitary and phytosanitary measures, which protect human, animal or plant health. There may also be technical barriers to protect the environment, national security or consumer information. Consequently, non-tariff barriers can be more difficult to negotiate than tariffs.

For example, beef and veal imports into the EU are mainly limited by sanitary and phytosanitary measures. In particular, beef from animals treated with growth hormones is banned, as is the use of ractopamine growth hormone in pigs.

Some UK food products have EU Protected Food Name status, which prevents competition from similar products from other regions or countries. This provides some protection from imported products and market differentiation when exporting.

Furthermore, some bilateral trade agreements that the UK has with non-EU countries are based on EU rules and regulations. To avoid cutting off trade with those countries, these agreements will require negotiation and revision.


The EU currently has 34 bilateral and regional trade agreements with 60 countries, and 5 agreements that have been finalised but not yet applied: this includes the Comprehensive and Economic Trade Agreement with Canada (Figure 3).

Figure 3: Trade agreements between the EU and the rest of the world.

It is interesting to note that negotiating with the EU will require all the 27 remaining Member States to agree.  By contrast UK acting along can arrange a whole series of bilateral agreements.  It is not inconceivable that the non-EU deals might be easier to conclude that those with EU, but no-one should be under any misunderstanding about the number of arrangements that need to be agreed.

Table 1 below therefore aims to explore where the main non-EU opportunities might lie and consider their implications and also to highlight those areas where a free trade agreement (FTA) with EU is likely to be an important priority or will need timely consideration of alternatives.



Main opportunities


Target countries

Other opportunities

Beef and veal

Pasture-based production

Target low-value cuts and offal markets

Target high-end customers with premium cuts

Limited market access

Uncompetitive on price

Lack of processing facilities for cow beef

China, rest of Asia and Africa: offal and low-value cuts (China already has FTAs with New Zealand and Australia)

USA: premium cuts

Impose import tariffs to protect the domestic market, although this may cause consumer price increases

Develop UK processing facilities to avoid the carousel effect


Pasture-based production

Target high-end customers with premium cuts

Target low-value cuts and offal markets

Uncompetitive on price

Heavily reliant on EU exports

Slaughter of Northern Ireland lambs in Ireland could be restricted

China, rest of Asia and Africa: offal and low-value cuts (China already has FTAs with New Zealand and Australia)

Impose import tariffs to protect the domestic market, although this could cause price volatility and carcase imbalance problems

The EU is the main customer, so look to develop FTAs


UK can prioritise FTA negotiations that benefit pork production

Target low-value cuts and offal markets

Limited meat processing facilities

Heavily reliant on EU exports

South Korea, Vietnam, Russia (if ban is removed), China, rest of Asia and Africa

Impose import tariffs and/or TRQs to protect the domestic market, although this may cause price volatility and carcase imbalance problems

Address pigmeat market opportunities

The EU is the main customer, so look to develop FTAs

Dairy products

Increasing, more affluent global population looking for added-value dairy products

Increase supply chain investment to enable industry progress

Heavily reliant on EU exports

Lack of opportunity to grow domestic market

Cross-border trade between Northern Ireland and Ireland for further processing could be restricted

Russia (currently closed), China, other Asia, Middle East and North Africa

Develop processing facilities in the UK to avoid the carousel effect

The EU is the main customer, so look to develop FTAs

Cereals and oilseeds


Established global trade

UK could be flexible with import tariffs to benefit its market and standards

More exposure to global market forces

Flour exports to Ireland could be limited by higher tariffs

Current trade with Algeria, Tunisia, Japan

Address flour export issues

Consider approach to genetically modified crops

Look to develop FTAs with EU countries


Target markets for higher-value products such as seed potatoes and crisps

Varying non-tariff barriers for plant health

High import tariffs to Morocco and other countries may make exports from UK prohibitively expensive

Far East, Middle East and North America for crisps

Morocco and Egypt for seed potatoes

Look to develop FTAs with EU countries

Horticultural products

Increase import tariffs to expand domestic production of certain crops and displace imports


Imported crop inputs

Limits to free movement of workers

UK businesses that have EU production units bringing produce back into the UK

Limited scope to open new markets outside the EU

Look to develop FTAs with EU countries

Consider TRQs on certain crops from importing countries

The UK may decide not to implement import tariffs for products coming from the EU and elsewhere, instead choosing to reduce or remove them completely and to set TRQs.

This would allow other countries to capitalise in the following ways:

  • beef and veal: Australia and North and South America could increase their exports to the UK. They will be extremely competitive on price, as they operate low-cost production systems. They are likely to target premium cuts in the food service sectors in the first instance. This development would have a detrimental effect on the UK supply chain by driving down prices and increasing supplies.
  • sheepmeat: New Zealand and Australia could increase their exports to the UK. However, New Zealand is unlikely to do so, as it does not currently fulfil its EU TRQ. An increase in Australian imports could displace domestic product and push down prices. Conversely, this could also benefit domestic production by ensuring that more product is available for consumers to purchase, which could subsequently increase consumer demand.
  • pigmeat: The USA, Canada and Brazil are significant exporters of pigmeat after the EU. They can also produce and subsequently sell their products at lower prices. In the absence of import tariffs, they may be able to compete with domestic products.
  • dairy products: Butter and cheese are most likely to be affected by the removal of import tariffs, as countries such as New Zealand may look to increase shipments of butter and potentially displace domestic products. Australia, New Zealand, the USA and Canada are significant cheese exporters and are likely to target the manufacturing sector, including with cheddar from Canada.
  • cereals and oilseeds: Although the UK  already belongs to a global trade network for cereals and oilseeds, the removal of import tariffs would expose it to stronger global forces such as periods of over- and undersupply. This would increase market volatility.


What is beyond doubt is the complexity and number of arrangements that need to be sorted, just for agriculture and food alone.  Other sectors will also be vying for their important relationships to be resolved.  The next two years will continue to see considerable uncertainty, a problem for all businesses.  Within this the UK agricultural industry needs to make its voice clearly heard to ensure that agricultural products get a fair deal during the long and complex FTA negotiations.  In the absence of agreements for on-going EU relationships there needs to be very significant progress with non-EU countries.  There is a lot to do and all those involved will need all the available support to get satisfactory outcomes.

ADAS’s core strengths in both public and private sector markets are in the provision of informed, independent and impartial research and consultancy to provide:

  • Robust evidence for policy development and position statements
  • Impact assessments and feasibility studies
  • Monitoring and evaluation
  • Industry intelligence and insights

At ADAS, we can help our clients to ask the right questions – and make the right decisions.

If you would like to discuss business or policy implications in light of Brexit please contact us at

For more Brexit related information please see the ADAS Brexit Policy Group Service page and our recent Brexit news articles.


Emma Jones
Agricultural Consultant , ADAS

Emma is an experienced consultant with wide and varied expertise in agriculture, meat processing and meat marketing.  She is particularly skilled in business and market analysis, market development for red meat products, rural business consultancy, and agri-environment and business development grant schemes.



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