EU/UK trade challenges in organic sector
UK/EU Organic Trade Deal concern for immediate action
We’d like to draw your attention to some important challenges associated with the scope of the UK-EU Trade & Cooperation Agreement (TCA), and to urgently call upon you to support us in our effort to avoid future disruption in EU-UK trade in organic.
The scope of the EU/UK TCA does not extend to products imported from third countries and re-exported without undergoing further processing (this to mean 'substantially altered'). Important and well established trade routes involving third country products that access the EU through GB, or GB through the EU, may have to cease, unless there's a change in the scope of the TCA, or an alternative mechanism agreed to recognise such products.
Current trade in out-of-scope products may be temporary
Import of products that fall outside the scope of the deal from the EU is only currently facilitated by a delay in implementation of requirements for GB Certificates of Inspection (COIs) until January 2022. While not allowing out-of-scope products to be traded, this currently allows product to go 'under the radar,’ resulting in a false impression that trade is in compliance with the terms of the TCA.
Export trade in out-of-scope products to the EU/NI is only partly facilitated in GB, with products exported under the Annex IV approval of individual control bodies. Although all six UK control bodies are currently included in Annex IV of 1235/2008, they're not all enabled to operate in TRACES NT under that approval. Currently, only Soil Association Certification has been granted this functionality in TRACES NT.
Regarding future imports, Defra has indicated that they will not put in place a similar mechanism for approval of EU control bodies until the EU Commission clarify that this type of approval will enable trade of products that fall outside the scope of the TCA. We as a certifier have been advised by our EU EC1235/2008 accreditor that we may continue to trade out-of-scope products under EC1235/2008.
Impact to the organic sector
The organic regulations within GB and the EU, including the import of products from third countries, have a common origin in EU regulation and remain aligned, so we can see no objective reason why the products that currently fall outside the TCA should not be included.
The impact on organic business is already significant in GB, where other control bodies cannot approve their clients' COIs due to lack of access to TRACES NT as an approved 1235/2008 Annex IV control body.
We believe the impact will be even more significant in GB, and throughout the EU, should Soil Association Certification lose EC1235/2008 status within TRACES NT or products be prevented from moving from the EU to the UK in January 2022.
The UK organic food and drink market was valued at £2.62B* in 2020, and although precise data on EU trade is not available, it’s estimated that total UK organic exports to the EU could be as high as £248M a year.
Around 25% of certified exporters to the EU registered on the EU TRACES NT system are known to have requested to export products outside the scope of the TCA. Given that businesses exporting out-of-scope product may command a disproportionate share of exports, should export of such products be prevented, the overall impact could be significantly more than 25% of all EU export value. Correspondence between certifiers and licensees suggest that financial impact on individual businesses could be very significant.
* Soil Association 2021 Organic Market Report
We urge UK businesses to write to their local MP
We believe that failure to resolve this matter could, by extension, significantly impact the UK organic sector as a whole. We'll continue to lobby EU and UK trade, governance and stakeholder groups - both directly and through other organic groups - as we call for intervention at both EC and UK government level.
As we do this, we're also urging all our organic clients, whether directly affected or not, to write to your local MP, making them aware of the potential impacts to EU-UK trade, should the matter remain unresolved. Our four key asks are summarised in our template letter, which you can download below.
We’ll continue to keep our clients informed via Certification News, and in the meantime, we very much appreciate anything you or your business can do to support us in influencing a positive outcome for future EU-UK trade in organic.