This establishes the country of origin of imported and exported goods and identifies those which qualify for lower or nil customs duty.
The report ‘Rules of origin in an EU-UK FTA: A ‘hidden hard Brexit’ for food and drink exporters?’ commissioned by the Food and Drink Federation (FDF) and the National Association of British and Irish Flour Millers (NABIM), has warned about the impact of goods that are made with both UK and international ingredients.
The issue is important because many of the ingredients are not produced in the UK or not in sufficient quantity throughout the year to meet consumer demand.
Significant risk
The report acknowledged that the UK Government aimed to negotiate a free-trade agreement with exporters, but they would still need to comply with complex origin requirements posing “significant risk” for UK firms exporting to the EU.
It claimed manufacturers could face costly restructuring of their supply chains or barring from future EU-UK trade as a result of prohibitively high tariffs for food and drink.
“Rules of origin are a big piece of the Brexit puzzle for the food and drink industry,” said Ian Wright, director general of the FDF.
“If we fail to secure sufficiently generous rules as part of a preferential trade agreement with the EU, food and drink manufacturers will be the ones who suffer this hidden hard Brexit.”
Export costs
“They could be facing an increase in exporting costs, or a complete ban of entry to the market.”
NABIM director general Alex Waugh warned that flour millers in the UK source 80% of wheat from the UK, but also used grain from Canada, the US and other European countries.
“If the rules of origin adopted in many of the EU's trade agreements were to apply in a trade deal between the EU 27 and the UK, flour milled with even a small proportion of these grains, and many foodstuffs made from it, would no longer be considered ‘of UK origin’ and would therefore be subject to very significant duties,” Waugh said.
The knock on impact, he argued, could add €0.10 to the cost of a loaf in Ireland.
The report also set out practical recommendations the UK and EU can take to minimise disruption to our essential and seamless trade in food and drink.