We're live now discussing the food and drink export sector with leading experts Nick Allen of @BMPA_INFO, @emilyrees_eu, @KaarinGoodburn of @ChilledFood & @William_Bain. Follow this thread for more 1/ https://twitter.com/UKTradeBusiness/status/1387696996954243072

First question is from @LaylaMoran setting the scene for the sector. @William_Bain says "overall the UK has a trade deficit in terms of food & drink", which was £24.3bn in 2019. Trade is primarily going to the EU, with 60%; around 38-40% is going to the rest of the world. 2/

Nick Allen of @BMPA_INFO gives us an example from the meat sector, saying on the face of it the UK is self-sufficient in lamb & mutton, but in reality we export 1/3 of what we produce and import 1/3 of what we eat, due to seasonality and consumer preference for specific cuts. 3/

. @Dr_PhilippaW talks abt DEFRA committee report calling on govt to seek a veterinary agreement. Could that reduce bureaucracy for business & delays at borders?

Nick Allen says meat was a 24-hour supply chain. Additional checks now add at least 1 day and £1000 in paperwork. 4/

Did the EU offer a Swiss-style arrangement for vet checks? @emilyrees_eu says T&CA was only adopted in EU Parliament yesterday - this is the starting point. It has a v skinny chapter on Sanitary & Phytosanitary checks - there was a q whether UK govt would diverge in this area. 5/

There's rarely a one-size-fits-all arrangement on S&PS checks. It's a trust issue to ensure the partners don't diverge. Usually agreements start in one area - e.g. meat - and then are built on once it's proven to work and the partner has maintained standards. @emilyrees_eu 6/

. @PaulGirvanMP asks whether the Trader Support Service (TSS) has helped to ease food and drink movements from GB to NI? Notes many SMEs are struggling despite TSS.

@William_Bain says TSS "never going to be a silver bullet" and "wasn't intended to be". 7/

. @William_Bain can see the benefit of having a holistic approach with a single gateway to cover all the paperwork & additional checks companies are facing moving goods from GB to NI. TSS doesn't cover multiple areas such as goods that require veterinary checks or are VAT-able. 8/

Next q @LSRPlaid - are there other issues around non-tariff barriers that we should be aware of (particularly in relation to shellfish &red meat)?

@emilyrees_eu looks at goods that are subject to Sanitary & Phytosanitary (SPS) checks - that cd impact on human or animal health 9/

There are documentation checks, physical checks & sometimes laboratory checks depending on level of risk relating to the exported product. The easing of checks will be specific to each item (e.g. lamb), so @emilyrees_eu recommends an itemised approach to reducing checks 10/

Next question from @hilarybennmp - are the checks that the EU imposes in these areas more rigorous than other countries around the world?

@emilyrees_eu says SPS checks is v much an international requirement. Strength of checks depends on domestic regulations. 11/

Food that's being produced in the UK and exported to the EU is still the same & following same regulations as before end of transition period. So what is the risk to EU? Asks @hilarybennmp.

No matter which country we have problems - @emilyrees_eu mentions horsemeat scandal 12/

...E-coli outbreaks and other recent examples in the UK, France and Germany. These countries have a v high standard of production, but they still have issues. This is why every country will have checks. @emilyrees_eu 13/

Question from @MichaelAodhan - what checks are newly required under the Protocol?

@William_Bain says island of Ireland has always been considered a single area - mentions foot & mouth outbreak and how there were always some checks for goods coming from NI to GB & vice versa 14/

But it was only the most sensitive goods that were subject to checks, says @William_Bain. Combination of TCA + Protocol has taken Rules of Origin out of the equation which is positive. 15/

Nick Allen says on the whole the NI Protocol has helped - it's easier to trade into NI than Europe, but only just. Some suppliers have mentioned anecdotally it's easier to trade into Dublin then move goods from there to NI. 16/

A multi-product consignment would need as many SPS checks as there are products. So trading single products in bigger batches will be preferred form of trading. There won't be a quick solution to this & it'll affect SMEs (e.g. specialty food producers) the most @emilyrees_eu 17/

. @SirRogerGale presses on disproportionate impact on SMEs. @emilyrees_eu says these businesses often don't have the same experience/expertise in exporting as they've been used to trading freely with EU. There will need to be a big training process but that won't help w/ cost. 18/

Nick Allen: "we have adapted a system that was designed to shift big containers of food across the world" - this system is not designed for a just-in-time 24/7 food supply chain. E.g. the need to have fully-qualified vets to sign export health certificates for a cream cake. 19/

. @StephenFarryMP asks what has been the effect of the grace periods in implementing the NI protocol?

Nick Allen says grace periods have helped. Thinks there would've been more empty shelves if brought in immediately - extremely worried about what will happen when they go. 20/

How disruptive would a trade deal with Australia or e.g. Brazil be in ruling out SPS veterinary agreement with the EU? Is it theoretically possible for the UK to conclude a time limited veterinary agreement with the EU to keep options open? asks @StephenFarryMP 21/

There is no question of having a less safe food come in - it's either safe & respects the country's domestic legislation, or it isn't and it gets rejected at the country's border, says @emilyrees_eu.

A trade deal w/ AUS unlikely to be a free flow of agri trade. 22/

Aus deal likely to be a tariff-free quota says @emilyrees_eu. Need to ensure deal doesn't have too much impact on domestic production (price & supply). It's there to create resilience in the market - UK relies on imports for its own food security. We need diversified imports. 23/

We're hearing now from @KaarinGoodburn - "before, sending anything across any patch of water was the same as putting it on a train to Doncaster." Changes since 1 Jan have been significant, expensive and extremely time consuming for businesses represented by @ChilledFood. 24/

. @ClaireHanna asks whether we can quantify the number of checks that could be eliminated between NI and GB - has heard estimates of up to 85% of checks being reduced if there was a Swiss-style veterinary agreement with the EU, for example. 25/

. @William_Bain agrees there cd be a significant reduction in number of checks going GB-NI - if the political will is there to do so. Nick Allen agrees a veterinary agreement would help alleviate a lot of the issues companies are facing with GB-NI exports - but it's political. 26/

FTAs don't change domestic regulation relating to the way we produce food @emilyrees_eu. But if there was a change in UK legislation creating new flexibility (e.g. on hygiene of products) that'd create more friction & less incentive to get a veterinary equivalence agreement. 27/

. @SirRogerGale says one of the benefits of leaving the EU would be to exclude products that don't match high UK standards to help promote domestic businesses. Asks about possibility of not just maintaining standards but raising them. @emilyrees_eu says this is possible now 28/

But any divergence in standards with the EU - even if it's raised - will create friction with the EU @emilyrees_eu

Nick Allen says there's a lot of confusion over what we as a country mean by standards. Doesn't see any plan to replace European Food Standards Authority in UK 29/

The UK's FSA is also a police force, so if you hand everything to that organisation you'd be effectively asking them to mark their own homework. We need a different independent body on food standards that can make some evidence-based recommendations says Nick Allen 30/

. @William_Bain says a lot of standard-setting is actually done globally now. The Codex Alimentarius, or "Food Code", will become more important as trade flows become more globalised. 31/

Sovereignty and divergence has a cost. In any plan there was to diverge there must be an impact assessment of what the cost and opportunities would be domestically, but also what the cost and opportunities would be for businesses. Divergence can't come at an additional cost. 32/

. @KaarinGoodburn talks about how the export health certificates are poorly designed. There isn't enough physical space on the form to list all the sources for the products in, e.g. a ready meal, meaning up to 50 extra pieces of paperwork per lorry. 33/

. @geoffmackey1 asks @William_Bain whether we really knew 'what we were signing up to' given the continuing changes to checks.

@William_Bain says key asks now are around breaking down the SPS checks into different categories/individual products, and the pinch points in those. 34/

The key thing for the government to remember now is to engage with business - so things are done WITH business and not TO business says @William_Bain. 35/

. @PaulBlomfieldMP asks are we facing teething problems or are we facing a long-term difficulty? How far are UK exports to the EU going to return to something close to normal - and when might that happen?

@emilyrees_eu says - what is normal? 36/

. @emilyrees_eu says unless we return to the customs union then there will be no return to how things used to be.

One thing we should all keep in mind is this will have long-term ramifications and will also change availability within UK domestic market of food produce. 37/

The question becomes where companies seize opportunities. Do they find new supply chains? Very difficult to pre-empt because it's not countries that trade, it's companies, and they're the ones that will have to decide about changing product ranges or production. @emilyrees_eu 38/

We have a permanent situation here unless something radical changes, says @KaarinGoodburn. The cost of doing exports now takes a lot out of what the profit used to be.

Companies will set up in, for example, the island of Ireland rather than dealing w/ burden of GB-NI trade 39/

Nick Allen says @BMPA_INFO members are running now at about 70-75% of pre-1 Jan trade. It's the added value that's being lost now. It's about individual companies - bigger companies can e.g. export carcasses & cut them up abroad, which also means those jobs are now abroad. 40/

Are there actually any benefits to food and drink exports in the TCA, asks Andrew Ballheimer? Any difference now between UK and US exporting into EU?

@emilyrees_eu says in terms of veterinary checks we are operating as a third country. 41/

Nick Allen says we're trying to disentangle a 24/7 just in time supply chain with the EU now that we're operating as a third country, and as far as he can see we're being treated the same as any other third country and trading on WTO terms. 42/

. @William_Bain says there's a widespread consensus across the food and drink sector that there are opportunities to make this point about the need for the TCA to be expanded upon before the 5-year review point. 43/

. @William_Bain key areas for concern:
- Suppliers in EU not ready for inbound border controls starting in October
- Workstream between UK govt & EU Commission doesn't yield results we need by early autumn
- Political instability in NI around application of Protocol 44/

. @William_Bain recommendations:
- Auditable and verifiable supply chain in NI
- Veterinary agreement with EU
- Structured conversation with govt and EU to create less friction

45/

. @emilyrees_eu recommendations:
- Identify low-hanging fruit that can be sorted that are product-specific or sector-specific through an exchange of letters
- Regulations are already starting to diverge - need better means of monitoring EU regulatory changes
- Educate SMEs 46/

Nick Allen recommendations:
- Still huge variation in vet interpretation of checks needed - needs to be standardised
- Simplify inspection/certification system - electric documentation is desperately needed
- Veterinary agreement - do it bit by bit to help ease critical areas 47/

. @KaarinGoodburn:
- System isn't fit for purpose, not designed for just-in-time chilled products, extent/type of trade being done
- 89k export health certificates have been issued this year compared w/ 806 last year an 110x increase - each has to be signed by vet. = 7500 days 48/

. @KaarinGoodburn recommendations:
- Digitise composite products decision tree
- Get rid of 24hr pre-notification, losing a days' shelf life. Should be 4hrs or even something in between
- Help vets understand what's needed to sign export health certificates

49/

Huge thanks to our witnesses today @KaarinGoodburn, Nick Allen, @emilyrees_eu and @William_Bain. Our next session will be on 13th May on financial services, chaired by Peter Norris, Chair of Virgin Group. /ENDS