“It is fair to say that during the negotiations they have been somewhat aloof on a number of important areas such as whether they will give us a third party listing for products of animal origin. It should be a no brainer and should be straightforward,” he told the EFRA Committee.
Third party status is the EU classification for non-member states that enables them to export into the single market.
Eustice also highlighted other unresolved issues such as the securing of equivalent agreements on organics, labelling and marketing standards.
“I think the way I would characterise it as a negotiating tactic dressed up as procedure,” said Eustice.
“It is no surprise it has been a difficult set of negotiations. The EU has been quite intransigent on certain issues such as state aid rules and fisheries.”
He said that the Government was working to ensure that there would be a smooth transition but the EU effectively wanted to enjoy the same privileges as it does now and “we can’t accept that.”
Challenges
However, one of the biggest challenges is how the EU will respond after the end of the transition period. Eustice said that the Government could not be responsible for the preparation of the EU at the borders and that was one of its “greatest concerns.”
He added that leaving with a no deal and tariffs would mean food price rises for consumers would be “quite modest” and it was likely that there would be a bigger impact from exchange rates.
On seasonal workers needed for the agricultural sector Eustice said that this year roughly one third were UK labour, one third were under the Government pilot scheme and the rest were EU citizens already in the UK. He admitted that UK workers had not been as productive as those from other countries but said the Government wanted to make sure that there was employment opportunities moving forward for people such as those working in hospitality that were likely to lose their jobs over the next few months due to the Coronavirus pandemic.
Unemployment
This was a view that was highlighted during an EFRA committee meeting in the House of Commons last week.
Tim Rycroft, chief operating officer at the Food & Drink Federation said that “sadly” the spike in unemployment that the UK is seeing may to some extent “ameliorate” some of the immediate consequences of labour shortages in the food and drink sector due to Brexit.
“It may be that an increased pool of labour in the UK will act as a buffer,” he said.
He added that there is a “big obstacle” in that a huge number of businesses were set to face increased costs and bureaucracy in ensuring migrant labour after Brexit.
“Part of the problem is that we are dealing with a large number of businesses that have never had to engage with any kind of processes or systems around recruitment suddenly facing the fact that they will have to apply for licences, pay fees, appoint new roles in their businesses to supervise visas and all that kind of thing,” he said.
Richard Griffiths, chief executive of the British Poultry Council, agreed that replacing the workforce for the food and drink sector would be challenging.
“The issue we have with labour is that we have around 40,000 direct employees, of which about 60% are from EEA countries. That workforce cannot be easily replaced in the short period of time that we have,” he said.
“We need certainty, not just on the business side but also certainty to encourage those people who are here to stay for the long term and to encourage new people to come.”
He added that it has been acknowledged that the UK is very good at producing food but “it is going to be a very tough time in the next year for a lot of food producers. ”