The UK’s food and drink trade policy should be customised to the specific priorities, strengths and trading patterns of the UK. As the UK sets out a broad new trade policy and continues to seek new or updated preferential trade agreements with partners around the world, it also needs a refreshed trade policy for food and drink.

Imports provide resilience of supply by balancing UK and diverse, stable, international production. They provide a competitive spur to innovation and productivity, access to raw materials that are not produced in the UK and contribute to our food security. They also create opportunities for the addition of value and export by UK manufacturers.

The UK’s export strengths are often driven by innovation and investment in food production processes, brands and local product identities. While tariff elimination remains an issue in some markets, UK trade policy also needs to tackle regulatory issues, including those linked to new or innovative products, and defending intangible knowledge and brand assets.

FDF’s trade and investment strategy for food and drink sets out our plan for UK government to maximise the benefits of trade in food and drink.

Our trade priorities

Canada

Canada is a major trading partner for many UK food and drink manufacturers. It is a valuable market for exports of high-quality UK manufacturing worth £372.0 million in 2021, a slight rise of 0.2% since 2020. It is also an important supplier of ingredients and raw materials that aren’t produced in sufficient volumes domestically, that are essential for UK manufacturers to produce their full range of products and complement their use of domestically produced inputs. Imports from Canada were worth £590.2 million, increasing by 27% in 2021.

The UK and Canada aim to improve on the continuity trade agreement, ensuring it meets the needs of businesses on both sides. This presents opportunities to secure terms that better benefit food and drink manufacturers, increasing trade and driving growth and job creation.

This paper sets out an overview of priorities for the renegotiation of the existing UK-Canada preferential trade agreement that have been identified in discussion with the FDF’s members.

Canada trade priorities

Gulf Cooperation Council

The Gulf Cooperation Council (GCC) is already an important trading partner for many UK food and drink manufacturers, primarily as an export market, but offers significant untapped potential to further grow sales of value-added UK food and drink. In 2020, our exports were worth £624.5 million, up 4.5% from 2020 due to the impacts of COVID-19. Imports of food and drink from the GCC are comparatively low at £41.8 million. As a bloc, the GCC is our sector’s seventh largest export destination and our third largest non-EU market.

Our sector runs a large annual trade surplus with the GCC of £580 million or more with many sub-sectors offering significant further growth opportunities. Saudi Arabia is the GCC’s biggest importer of food and drink but only the UK’s second largest GCC export destination after the UAE.

Our priorities are overwhelmingly related to securing new and improved market access for UK exporters and we would support an expansive UK approach that can deliver substantial reductions in tariffs and more harmonised and simplified approaches towards labelling, product certification and border requirements, including a more consistent approach towards Halal labelling. This would remove barriers that currently impede UK exporters that offer the greatest potential to take advantage of opportunities created by the GCC’s rapidly expanding population and increasing westernisation.

This paper sets out key priorities for the Government’s preferential trade negotiations with the GCC that have been identified through extensive member consultation.

Gulf Cooperation Council trade priorities

India

India is an important trading partner for many UK manufacturers, primarily as a source of ingredients and raw materials that are not produced domestically. A preferential trade agreement presents opportunities for UK producers but carries significant risks and will require a different approach from UK Government to talks with Australia and New Zealand.

During 2020, imports from India increased 3.7% to £591 million while UK exports fell by 33.1% to £128 million, largely due to the COVID-19 pandemic. India’s rapidly growing middle class presents major opportunities for UK exporters. Demand is booming in India in the health, organic, fortified and ready-to-eat packaged food sector, driven by increasing consumption of convenience foods.

India’s prohibitively high tariffs averaging 34% impede UK exports and significant opportunities exist to grow sales of UK chocolate and dairy products including protein concentrates, as well as whisky, gin and beer.

While opportunities exist for UK exporters, UK Government should exercise caution due to challenges presented by India’s inconsistent application of production and labour standards and its use of trade distorting export subsidies. No outcome of negotiations should result in any weakening of protections for health, safety or the environment.

This paper sets out an overview of priorities for the UK in potential trade talks with India that have been identified by the FDF’s members.

India trade priorities

Israel

Israel is an important trading partner for many UK food and drink manufacturers. While a continuity trade agreement currently applies to trade between the UK and Israel, an updated deal could significantly boost our trade and benefit both parties. In 2021, our exports were worth £105.1 million, up 26.2% from 2020, while UK imports from Israel experienced similar growth of 21.5% to £133.1 million. Israel is currently our sector’s 33rd largest export destination and our 47th largest supplier of imported food and drink. Like the UK, Israel’s relatively small geographical size and limits on agricultural production precludes self-sufficiency in food and drink.

This should present a good opportunity to negotiate a new trade deal that better reflects the needs of both markets, delivering increased market access and facilitating growth in agrifood and drink trade in both directions.

Our main priority is to secure improved market access for UK exporters through a more ambitious goods chapter that delivers reductions and simplifications to tariffs applying to trade in both directions. Israel is an important supplier to the UK market and reducing barriers to imports would benefit UK manufacturers and consumers.

This paper sets out priorities for the renegotiation of the existing UK-Israel preferential trade agreement that have been identified in discussion with the FDF’s members.

Israel trade priorities

Mexico

Mexico is an important trading partner for many UK food and drink manufacturers, but significant opportunities exist to expand trade in both directions through a more comprehensive and ambitious preferential trade agreement. We have seen a sharp decline in both imports (-24%) and exports (-33%) due to the COVID-19 pandemic and in 2020, our exports to Mexico were worth £107 million with imports of £176 million.

The existing deal with Mexico doesn’t deliver the ambitious outcomes seen in recent trade deals such as the new UK-Japan agreement. It excludes many food and drink products, with prohibitively high tariffs blocking trade, including for UK exporters of dairy products (50%) chocolate and confectionery (20%), pork products (45%) and poultry products (100%).

The UK and Mexico aim to improve on the continuity trade agreement, ensuring it meets the needs of businesses on both sides. This presents opportunities to secure terms that better benefit food and drink manufacturers, increasing trade and driving growth and job creation. It is vital that the outcomes at least match the new EU-Mexico agreement, to ensure UK exporters can compete effectively with EU counterparts.

This paper sets out an overview of priorities for the renegotiation of the existing UK-Mexico preferential trade agreement that have been identified in discussion with the FDF’s members.

Mexico trade priorities

Resources

FDF rules of origin report

In 2018, the FDF published a report with Global Counsel setting out proposals for rules of origin in a UK-EU preferential trade agreement. These proposals remain relevant for the UK’s wider trade negotiations.

Download

Moving food and drink from GB into Northern Ireland

This infographic sets out a schematic of the steps that are required to move food and drink into Northern Ireland from Great Britain.

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Moving food and drink from Northern Ireland into GB

This infographic sets out a schematic of the steps that are required to move food and drink into Great Britain from Northern Ireland.

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News

The UK and Mexico begin trade negotiations

Following the start of trade talks between UK and Mexico, the FDF’s Head of International Trade Dominic Goudie highlights the benefits.

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The Food and Drink Federation responds to the launch of negotiations for a new Free Trade Agreement between the UK and Canada

The launch of talks between the UK and Canada is a great opportunity to secure improvements to an already ambitious agreement by putting in place a deal that is better tailored to trade in food and drink between the two countries.

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All news

Report: A UK trade and investment strategy for food and drink

09 June 2022

In this report, we have set out a series of actions which champions the interests of the UK’s food and drink industry alongside delivering economic growth and providing greater choice and affordability of products for UK households.

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