International Trade Committee
Oral evidence: UK trade negotiations, HC 127
Wednesday 22 September 2021
Ordered by the House of Commons to be published on 22 September 2021.
Members present: Angus Brendan MacNeil (Chair); Mark Garnier; Paul Girvan; Sir Mark Hendrick; Anthony Mangnall; Mark Menzies; Martin Vickers; Mick Whitley; Craig Williams.
Member of the Environment, Food and Rural Affairs Committee present: Neil Parish.
Questions 196 - 239
I: Henry Dimbleby MBE, Chair, National Food Strategy; and Nick von Westenholz, former Trade and Agriculture Commission member and Director of Trade and Business Strategy, National Farmers Union.
Witnesses: Henry Dimbleby and Nick von Westenholz.
Q196 Chair: Welcome to this afternoon’s session of the International Trade Committee on our UK trade negotiations inquiry, focusing on upholding UK food standards. We have two witnesses today and I will let both witnesses introduce themselves. We have Henry Dimbleby MBE and Nick von Westenholz, whom we have seen a number of times in the past. Starting on my left with Henry, name, rank and serial number for the record, please.
Henry Dimbleby: Thank you very much for inviting me here today. I am the lead non-executive director at DEFRA and the author of the National Food Strategy, which was an independent review commissioned by the Government in 2019.
Nick von Westenholz: I am currently Director of Trade and Business Strategy at the NFU but I was also a member of the Trade and Agriculture Commission.
Chair: Excellent. It is good to see you again. Without much further ado, I will turn to my colleague from Cleethorpes, Mr Martin Vickers.
Q197 Martin Vickers: To open the batting, I will turn to you, Mr Dimbleby. Could you outline what the National Food Strategy review recommended on food standards policy, with particular reference to trade agreements?
Henry Dimbleby: Yes. The Conservatives’ manifesto said that they would not compromise on high environmental protection, animal welfare and food standards. We made recommendations in two areas. One was on how those standards should be protected and the other was on the appropriate level of parliamentary scrutiny.
On how they should be protected, we recommended that the Government should set out what they mean by those standards. For example, in the UK you can house laying hens to a minimum of 750 sq cm per hen, whereas in Australia it is a voluntary code of 550 sq cm. You can mules sheep in Australia, which you cannot do here. Sow stalls are banned in only two states in Australia whereas they are banned across the UK. The first thing is to ask, when we say we will protect our standards, which standards we mean. The second thing is to set out how you maintain those standards should be protected.
On that second thing, we set out the same recommendation that the Trade and Agriculture Commission subsequently recommended, which was, in the Trade and Agriculture Commission’s language, that countries should not be able to get lower tariffs—they would not be considered for zero-tariff or zero-quota access—unless they can demonstrate equivalence with these core standards. We have set out exactly the same as the Trade and Agriculture Commission.
Yesterday, in response to the evidence I gave to the EFRA Committee, the Government—the Department for International Trade—said that they “are not compromising our high animal welfare and food safety standards in any trade agreements, and won’t allow any imports that do not meet those high standards.” It was interesting, first, that that statement missed off the environment. In their manifesto, they mentioned the environment, and yesterday they did not mention the environment. They just mentioned animal welfare and food safety. Secondly, they have not said what the standards are and what mechanism they propose to protect those standards. This Committee, if it can do anything, can ask the Department for International Trade to set out explicitly what it means by protecting those standards and how it will do that.
Q198 Martin Vickers: You have referenced Australia in particular. Trade agreements are inevitably compromise arrangements. From what you have learned in the last week or two about the Australian deal, should that be a complete barrier to finalising the deal?
Henry Dimbleby: Not necessarily. As you say, if you said they had to be exactly the same standards, we would not be able to do a deal with even the EU or a lot of our hangover deals. You have to be clear. Are the Government willing to ditch the whole deal on, for example, hen laying and 750 sq cm versus 550 sq cm? The Government need to make those decisions and be explicit about them. They need to say what standards are important.
The Australia and subsequently the New Zealand trade deals are not the really big issues. The really big issues are Brazil and the US. On environmental standards, Brazil’s beef is on average 70 kg of carbon dioxide per kilo of beef, whereas ours is 30 kg. The US has substantially lower animal welfare standards than ours. I see the Australia and New Zealand trade deals as precursors to much more fundamental decisions that need to be made on the US and Brazil.
Q199 Anthony Mangnall: I am always interested in this point about a precursor—one deal signifying how a deal manifests itself with another country. Certainly with Australia, I think a lot of people have assumed that every future deal we do with anywhere else is the case, and I am not sure that is necessarily true. I am interested to hear why you think that one deal will be reflected elsewhere, other than the message it sends around what we do on, say, standards.
Secondly, if I can bring Nick in briefly on this as well, there was a suggestion of a sliding scale, where you might reduce tariffs on a product if they improve their standards to match ours or if there was more environmental co-operation on how chickens were reared or how pigs were kept and all that stuff. I am interested in any further explanation on that and whether you had buy-in from any other organisations or from DIT on that concept.
Henry Dimbleby: On the first part of that question, we do not know what is in the Australia deal, so we do not know what those protections are. We are looking forward to hearing about them. The mood music—the signs and the noises coming out—has not been promising. But I hope that it does not need to be a precursor. It seemed in the early phases of deal making that it was a kind of supermarket sweep: get as many deals as possible in the trolley, regardless of the quality of the deals, to get them done and prove that we can do trade deals. For example, as someone who has negotiated deals, briefing to the papers that you will do the best deal ever with Australia while you are still negotiating seemed a peculiar way to go about negotiating the best possible deal you could get.
I am hopeful that those were indications of a Government that wanted to get some trade deals done and then, on the trade deals with Brazil and the US—the bigger ones—the Prime Minister’s saying yesterday or the day before that he wanted to do a good deal, not a quick deal, signifies a significant change in tack and approach. It does not necessarily need to be the case that one deal follows another. Anyone who has negotiated a deal knows that it is quite difficult in any kind of deal to give someone one set of terms and another person another set of terms, but it does not necessarily follow. Hopefully, for animal welfare and environmental concerns, it will not be the case with Brazil and the US.
Nick von Westenholz: I agree about the precursor issue. Clearly, the trade deal with Australia does not provide an unbendable template for all future deals, but once you have done a deal and the terms of that deal are clear and visible for all other counterparties to future negotiations, they will use that as a basis for those negotiations. The precedent nature of the first few deals is important. Through those deals you offer market access, and each time you increase market access you make market access for subsequent deals less valuable because there are already players in that market. Again, there is an important aspect of those early deals and the impact that will have on future trade negotiations and the counterparties there.
Q200 Anthony Mangnall: One of the criticisms of the European Union is that it has lower standards in a whole host of areas and lots of people are signing up to do trade agreements with it, Canada being the most notable. That is not stopping people then looking to sign trade agreements with us where our standards are considerably higher. There is a point about one area having lower standards but people still raising their ambitions to meet our level. Signing a bilateral trade agreement with the UK will give the opportunity to raise standards across the board even if tariffs are not in place or if we have gone under a free trade tariff basis. Does that come into consideration as well?
Nick von Westenholz: I do not quite understand the point.
Q201 Anthony Mangnall: It is the elevation of standards. It is not a race to the bottom. In fact, it is the opposite. The European Union has lower standards and therefore lots of people have signed trade agreements with it, but they are also looking to sign deals with the UK where our standards are considerably higher and where the expectation is higher. When we are signing a trade deal with Australia, when we see the terms, do we have some hope that the reason it wants to do a trade deal with us is because of the higher standards that we have already?
Nick von Westenholz: I think that is right: just because you do a trade deal that may not include what we might think are adequate provisions around standards, that does not mean that in subsequent trade deals you might do higher ones. But it is worth remembering that two countries can do trade deals—indeed, probably most FTAs currently in existence are of this nature—where environmental standards and animal welfare standards are just totally absent. You might have two countries with different standards. The fact that they have done a trade deal mostly about market access and tariffs is not driving the standards in either country.
An interesting aspect of the next few years is that there is now a debate about whether trade deals should do that more—whether we should continue to do old-fashioned trade deals that are just about market access, or whether we should do new trade deals that incentivise or drive higher standards. The Trade and Agriculture Commission was hoping to try to create the beginning of a policy agenda where market access is rewarded through higher standards and the mechanisms in there are how we try to achieve that.
Q202 Mick Whitley: In comparison, the EU trade agreement with Japan was similar to Japan’s trade agreement with the UK. When you look at some of these trade agreements, a lot of the chapters in them are cut and pasted, are they not?
Nick von Westenholz: Yes. They are not identical but the UK-Japan agreement was closely based on the EU one.
Q203 Mick Whitley: I do not think Japan was not going to give the EU a better agreement than it gave the UK.
Nick von Westenholz: On agriculture, it is probably slightly worse than the UK, but it is marginal.
Q204 Chair: I want to check a couple of things. Henry Dimbleby said that it is 70 kg of carbon dioxide for every kilogram of beef that Brazil is doing and 30 kg of carbon dioxide for every kilogram of beef that UK farmers are producing. Did I get those figures correct?
Henry Dimbleby: Yes, that is right. Australia is 45 kg. The US actually is 25 kg—it is lower than us—because the intensive feedlot system has a lower carbon footprint. If you look at tree loss, for example, Brazil had 835,000 hectares of trees lost in 2018. We had hardly anything. Australia had about 7,000 hectares. They are still removing forests to graze and rear livestock.
There are, all the way along, these areas where we need to make a decision about what is important. If you had a completely purist view, you would do no trade deals, but there is no point in holding our farmers to very high standards and then exporting significant harms—animal welfare harms, carbon dioxide emissions—abroad. If we want to have those high standards here, we need to recognise them in our trade deals and we need to move towards that.
Q205 Chair: Excellent. Thanks for the clarity and the extra detail. I think you were saying that when the UK Government talk about maintaining food standards, there is wriggle room and room for slippery phrasing, if you like. I know the bells will go, so I will probably have to pause this session in a minute. I will get a short answer here and we will go. Did you say something about food standards and about the way that can be phrased?
Henry Dimbleby: Yesterday, they talked about animal welfare and food safety standards. I think we will definitely be maintaining food safety standards, there are a lot of questions on animal welfare, and they seem to have removed the reference to environmental standards that was in the manifesto.
Chair: Thank you very much. I will adjourn the Committee and we will reconvene in about 10 minutes.
Sitting suspended for a Division in the House.
Chair: To kick us off, we turn to a knight of the realm: Sir Mark Hendrick.
Q206 Sir Mark Hendrick: Nick has already touched on this to some extent, but I want to ask him first of all to outline what the Trade and Agriculture Commission recommended about a general food standards policy for trade agreements.
Nick von Westenholz: It is probably worth quickly saying at the beginning how we came to the decisions, because it is important. You will know that the Trade and Agriculture Commission was quite broad in its constitution. It had lots of farming representatives and also those you could maybe crudely describe as free-traders and keen on having a liberalising trade policy. There was a broad church, and it was impressive that we came to a unanimous recommendation on this area. We tried to come up with something that reconciled the desire of the Government to have a liberalising trade policy—one that reduced tariffs, reduced barriers and opened markets here in the UK, but one that at the same time could maintain standards and, to a degree, incentivise higher standards overseas through access to our markets. They are not mutually exclusive, but it was quite a difficult balance to strike. That was at the heart of it.
The other important point is that we wanted to recommend something that was credible for international trade policy—something for which we would not be laughed at on the international trade scene and told, “That is all very ambitious, but nobody will do a trade deal with you if you do that.” What our negotiators could go into those trade deals with had to be realistic.
We came up with, essentially, three pillars. The first was simply recognition that the UK ought to establish what our standards are—not just food safety standards but environment and animal welfare standards—and that, as long as it was consistent with WTO rules, SPS rules and so on, we could restrict imports where they do not meet the standards that we have set down. Historically, that has been difficult on the environment and animal welfare, which are about production standards rather than the safety of the end product coming over your borders, but it is increasingly possible. Things like the US Marine Mammal Protection Act are beginning to impose import restrictions on the basis of production standards, environment standards and so on. There was a clear recommendation that the Government should be ambitious and progressive in doing that.
The second aspect was around the free trade deals themselves, where the recommendation was that the Government, in discussion with industry, NGOs and others, should come up with a set of critical core standards. As Henry was describing earlier, there may be some that are priorities and there may be some that you can give and take. All those discussions need to happen to come up with a list of core standards, and you negotiate those into trade deals. You are essentially saying to the counterparty, “We will give you tariff-free liberalised access to our markets for products that meet our core standards.”
The recommendation also included a mechanism by which you can enforce that, which is essentially to put a tariff on goods that do not meet those core standards. But also—I thought this was important—you are negotiating that trade deal and you are giving market access on the basis of imports meeting those core standards, so it is integral to the trade deal as well. You hope that if you are negotiating in good faith, you are giving tariff-free access for goods that are meeting those core standards. There is, though, a mechanism there to enforce it if they do not.
The final element was simply to become as active as possible in international organisations—the WTO, the “Three Sisters” and the like—where they set standards on animal health, plant protection and those sorts of things, so that you can raise those internationally. That helps what you are trying to do. If you and whoever it might be—Australia—agree the standards, doing these deals and allowing access for only high-standards goods becomes much easier, but we need to be realistic. That is a long-term game, and historically it has been quite difficult sometimes to get above lowest common denominators in the standard-setting bodies, but it absolutely should be prioritised.
Q207 Sir Mark Hendrick: To follow up on that, Henry mentioned space standards for hens. I would like you to comment on that, Nick—and also Henry, if you want to add anything to what you said earlier. It does not seem right to me that one country can have a certain space standard and another one can have another. In financial terms, there is some competitive advantage in allowing that to happen. But apart from the safety aspect—obviously, safety is a key part of it—is there any discernible difference in the quality of the eggs from the hens or the meat from the chickens because of that difference? Could that play a part in how you determine the quality of food, not just whether the food is safe to eat afterwards? Is it taste? Are there other considerations to take on board about quality food? Most people are of the view—I am one of them—that if animals are allowed to run around more freely and more naturally, they are likely to produce better food than if they are caged up, but is there any scientific proof of that?
Nick von Westenholz: I am smiling wryly because you are getting to the nub of one of the key debates in international trade policy around sameness and SPS controls—sanitary and phytosanitary, public health and plant health controls. You can apply what you need as long as it is justified by the science to ensure that things going on your market or coming into your environment are essentially safe, but if they are the same, you cannot really discriminate between them. The argument would be that a whole chicken packaged ready for consumption is the same whether it was produced in an organic environment, outside and so on, or in a more intensive environment. The end product is the same and that prevents you from discriminating against either in trade policy.
The truth is it becomes very difficult unless you go down a slightly different route and push the envelope to some degree and, despite the end product being essentially the same, put certain restrictions or requirements on the basis of the way the product is produced because you want a high-welfare product, for example. There is a live debate about the degree to which that is possible within WTO rules, but it is certainly arguable. We hope the Government, with their “global Britain” hat on, are willing to look at it to back up some of their other statements around wanting to support higher-welfare, more environmentally friendly, climate friendly food.
Q208 Sir Mark Hendrick: Does that sameness still apply if a chicken from the United States had considerable amounts of hormones whereas another chicken did not? For consumption purposes, they are both considered safe.
Nick von Westenholz: No, because in that situation it has been treated in a way that the UK Government at the moment argue is unsafe under SPS rules. Although they have been challenged on the evidence not supporting that, the position of the UK Government is that that practice is unsafe, the evidence demonstrates it is unsafe and, therefore, they will not allow that in the marketplace whether it was produced in the US, the UK or anywhere else. That is important because they are not discriminating against imports as opposed to domestically produced food.
Henry Dimbleby: Nick maybe did a disservice to the achievement of the TAC in doing what it did. Part of the argument had been that we should leave this to the WTO and to international collaboration. But to give you an example of how hard that would be, the OIE, the international organisation responsible for agreeing global standards on animal health, has 182 members ranging from liberal democracies to theocratic or communist dictatorships. The decisions they make have to be unanimous and only 32 of them recognise animal sentience in law. Getting agreement, say, on animal welfare that would be anything close to what we might value would be almost impossible in those groups in any kind of timeframe.
Secondly, as Nick said, the Trade and Agriculture Commission had broad membership and some liberal free-traders. It is fair to say that most of the community watching it were astonished not only that it came up with the recommendation that we needed to maintain our standards but at the elegance of the mechanism that it came up with to do that while meeting WTO regulations. The WTO, on the whole, has viewed these kinds of things as protectionist and has tried to stop them because, historically, countries used to use production standards to try to protect their own markets.
It is extraordinary what the TAC has done. We are waiting for the Government’s response to the Trade and Agriculture Commission. We are waiting to see how they want to define these standards and the mechanisms they propose, but they have this elegant solution at their disposal that has been recommended by people who could not be accused of being from the protectionist lobby. We are in an interesting phase of the Government’s positioning in these negotiations.
Q209 Anthony Mangnall: You have said the P-word. I want to ask about that. Why not just open it up to improving labelling and looking at allowing us to import cheaper products so that people can have cheaper food? Why is improving the consumer knowledge around the food that they are eating not a consideration? We are safeguarded by SPS standards that stop hormone-injected beef or chlorinated chicken coming to the UK. An Act of Parliament or a piece of legislation would have to go through the House for that to change. Should we empower the consumers as to what they decide to eat?
Henry Dimbleby: The simple answer is that that is not what citizens want. As part of our work, we did a lot of focus groups and polls. The polling shows relentlessly on this—82% in the most recent Opinium poll, 93% in the poll before that and 81% in the poll before that—that we must maintain our standards in trade deals.
The reason is that consumers, particularly the least affluent consumers, do not want a two-tier system. They do not want a system where one part of the population has to eat food that is produced in a way that is cruel to animals and destructive of the environment because they cannot afford to do anything else. They want the state to take care of this for them. They have enough in their lives to worry about. They want the food that turns up in their supermarket to have been reared to the standards that we as a country value. They want the state to have to care about that, not for them to make endless individual decisions and spend their whole lives reading the backs of packages to find out exactly how things are produced.
For example, at the moment you can transport an adult cow in Australia for 48 hours. The legal standard here is 12 hours. Would that be on the back of an Australian piece of meat? The voluntary maximum weight you can rear chickens to is 46 kilograms per square metre versus our 39 kilograms per square metre. Would you have that on the back? You would be completely bombarding the consumer with information that they want you, as the state, to have protected them from anyway.
Q210 Anthony Mangnall: I happen to agree with that point, but we are looking at labelling and the trouble that comes with trying to do labelling and how you would even find international agreement on labelling. Certainly, our own producers in this country find labelling to be a complete nightmare and any expansion of it makes things a lot more complicated.
We do not talk enough about exports and the opportunities that are there for British producers. It is world class. It will be sought after in new regions around the world. That has a knock-on benefit for what we can produce at home and the price at which we produce it. That is a conversation for a different time.
I want to ask—you have touched on it already—about the core standards. You suggested that you would go out and do consultation with organisations and with the Government and all of this. Where are you on that? What has the response been? I know you have not had a response to the TAC, but core standards seem to be a pretty key part of the recommendation here.
Nick von Westenholz: Yes. The fact that we have not had the report is a problem with developing those core standards. Originally, we hoped that we might get a response within three months. The Government need to play a central role in convening and starting that process. That is one reason we have been so concerned with the delay in getting the response to the report. It is not for the agriculture sector itself to come forward with those core standards; a number of different actors need to come together. I hope that the UK Government respond positively to that recommendation and then can kick off that process.
I have another point, quickly, on your previous question. Consumer information is important and we certainly support an improvement in labelling and an improvement in consumer information, but the broader food industry and others have been wrestling with this for a long time. It is difficult, for the reasons that Henry mentioned and others, to give consumers exactly the information they want and can use to make exactly those choices immediately. We know that price is important for consumers and we know that they usually start ignoring anything beyond the simplest information on packets. If there is too much information and too much wording on packages, they will ignore the whole lot.
The other important point is that in normal times pre-pandemic about 50% of the value of food eaten in this country was eaten outside the home. It was not bought in packets from shops; it was bought in pubs, restaurants and cafés. The information behind that food is woeful. It is difficult to know if you are being lied to, quite frankly. If you go into a place and they say, “This is a Herefordshire steak from down the road”, or whatever, it could be but it might not be. It will almost always be impossible to find out. It is part of the process but it will not solve it. A lot of our imports will go into the out-of-home food service sector—restaurants and so on—not into supermarkets with easy-to-read packages.
Q211 Anthony Mangnall: If there is meat from anywhere, we prefer it to be from Devon, for obvious reasons.
Chair: Going for the cheaper cut, lads, are we?
Anthony Mangnall: The Government have shown their ability to listen to Parliament on occasion, when we raise enough of a stink and a shout in the Chamber. They amended the five-year food security reporting down to three years, which seems to be good progress. Could you comment on whether environment and welfare standards should be included in the three-year reporting scheme and how that might manifest itself?
Nick von Westenholz: Yes. We would like that report, and it is worth reminding ourselves that the first one is due by the end of this year. It is every three years but the first one is due soon. We hope that that will come out. We hope that that report will be as wide ranging as possible and that the Government will take the opportunity to cover lots of issues and not just hit the minimum requirements under the legislation in what they produce.
To divert a little bit, the supply chain issues we are seeing right now because of the energy crisis and labour issues remind us exactly how fragile, potentially, our food supply chain is. There is a real opportunity in the next few months for DEFRA to come forward with something meaningful in that first report.
Q212 Anthony Mangnall: To be clear, will it include these areas or do you not know?
Nick von Westenholz: I can’t speak for DEFRA.
Q213 Mark Garnier: Henry, you talk about the quality of the beef and all the rest of it and how people do not want to have to make the decision. I absolutely respect that. I was reading the report. But they have been eating Australian beef for years. This stuff has been imported. Why is it now an issue when it was not an issue before?
Henry Dimbleby: They have been eating small quantities of Australian beef. The point is that we have not, for 45 years—or however many years it is—been a trading nation. By leaving the European Union, we have to conduct trade deals ourselves for the first time in living memory. It is clear that we have—
Q214 Mark Garnier: We have been a trading nation, though.
Henry Dimbleby: But we have not had to conduct our own trade deals. We have not been signing trade deals.
We have to make a decision on two things. I am speaking only to food standards. First, will we define those standards? The Government have said they will define those standards, so what are they? Secondly, what are the scrutiny mechanisms? Unlike all the other mature trading nations, we do not have any scrutiny mechanisms in place.
We have committed to defining those standards. The Government said yesterday that they will not allow any imports that do not meet those standards. Far be it from me to talk to you about your job, but I suggest there is almost no point in having anyone from Trade or the Government in front of this Committee talking about those standards until they have actually told us what they are. No one knows what they are talking about.
Q215 Mark Garnier: You are absolutely right, but let me put a hypothetical situation to you. We have the highest animal welfare standards in the world and we want to make sure we maintain those high welfare standards. If we want to be a trading nation, we end up with two problems. First, nobody else meets our standards, so we cannot import anybody else’s standards. Secondly, it becomes so expensive to produce that we cannot export it, so we paint ourselves into a corner where we cannot be a trading nation in food that comes from an animal.
Henry Dimbleby: Definitely. In fact, there are already examples where we make that trade-off. Whether it is importing bacon from Denmark that has been reared in sow stalls that are illegal here or importing oilseed rape from countries all over the world that has been treated with neonicotinoids, there are all sorts of examples where, to be a trading nation, we turn a blind eye and we decide that standard is not important enough to defend. The Government have to—
Q216 Mark Garnier: Are you suggesting we do not turn a blind eye any more?
Henry Dimbleby: No, I am suggesting you have to be clear and explicit about the standards that you care about. Do you care if chicken is reared to a density of 46 kg per square metre versus 39 kg or not? Do you care if animals are allowed to travel for 48 hours in a trailer versus 12 hours or not? Do you care if the mothers of your lambs have their rear ends cut off so they go raw and then scab up to prevent flystrike, or mulesing, as happens in Australia, or not? You have to be explicit about what those things are.
The Government have said they have been explicit. Obviously, from what I have described, it is politically difficult, which I imagine is why it has taken this long. But it needs to happen.
Chair: As someone who keeps sheep, I find mulesing quite awful. On that, we will turn to the Chair of the EFRA Committee, Neil Parish. We are grateful that he has joined us today.
Q217 Neil Parish: Thank you very much, Angus, for allowing me to come to International Trade again. I quite enjoy coming before you.
I want to continue, in a way, from Mark Garnier’s question. The whole direction of agriculture now is to reduce transport times and to let the chicken have more space. Everything we do is to higher welfare. That is good. But if we then turn around and trade at the lowest common denominator, we will not only destroy our own agriculture but we will reduce welfare standards across the world because we will be importing lower standards and we will have less production ourselves. If you can put twice as many poultry in your poultry house, most of your cost of poultry is producing that house to house those poultry. Therefore, again, you are not only at an animal welfare disadvantage but you are also at a competitive disadvantage.
We are a long way down the road now to negotiating with Australia. We should have had the core principles in place. We should have had the TAC in place. In fact, Parliament says the Trade and Agriculture Commission has to look at the trade deal.
I will target Nick first, on the core principles that you came up with and recommended to the Government off the Australia deal. Let us take mulesing or skinning the ewe to stop flystrike, which happens in Australia. It does not happen in New Zealand; they have banned it. To what extent, Nick, would the core principles rule out having Australian lamb that came from mothers that had been mulesed?
Nick von Westenholz: This is the question for the Government in developing those core principles. The TAC purposefully did not set out the core principles, for the reasons that Henry has said.
There are some value judgments to be made in setting out those core principles, and there are a number of variables that you might want to consider. You want to look at your own standards and the regulatory and legal requirements on farmers and the way that they produce food. Which of those are particular to the UK and therefore do not apply to imports anyway, and which marginal differences in standards might be close enough that you are willing to not say they are important? Others might have unintended consequences or trade consequences that you want to avoid. There are all these considerations, and I think mulesing is one of the things that would be closely considered in determining the core standards.
It is a great shame that we are sitting here now and that process has not begun, because we are on the cusp of signing a trade deal with Australia. I suggest that it would be highly unlikely now, given how far along those negotiations are, even if we were to kick off the process of developing a set of core standards, that they could be included in that trade deal. That is a great shame.
Q218 Neil Parish: It is a missed opportunity. I had assurances from the previous Secretary of State for International Trade that she wanted to put these core principles in place to help her in negotiations when it came to a trade deal with Australia or wherever. We have missed that opportunity.
I still do not want to be negative about it, because we want to reduce our animal transport times in this country, yet, as has been said, it is 48 hours in a very hot climate across Australia. It is 45 kg of carbon for beef against 30 kg in this country. We are moving—and farming is moving—towards net zero by 2050. To what extent can we link the carbon as well as the animal welfare in this trade deal? If we are to be sensible about how we produce our food across the world, carbon has to be one of those things. Will it be vastly complicated? How can we be sensible?
I know I am called a protectionist, but I am not a protectionist. I am just saying quite clearly that you will not be able to produce it for that money in this country. We have a temperate climate ideal for the production of meat and milk and yet we will end up not producing it; it will probably come from deforestation out of Brazil or wherever in the future. We have to have our eyes open. To what extent can we link carbon in with all things about the food we produce? That is what our public want. The trouble with labelling is they want it but they will not necessarily read the label or be able to identify the label when they come to buy. That is why we have to have some sort of protection in trade deals.
Even at this late stage, with the Government prevaricating, how will we make it stick with the Australia and New Zealand deals? How do we play one against the other, if you like, and say, “You in New Zealand are not mulesing your sheep; you Australians are”? How do we do that? In the end, we are not trading like with like even with two different trading partners, albeit quite similar in many respects.
Chair: It seems to me we have lost an opportunity in the reshuffle.
Neil Parish: They would not put me there, that is for sure. That is 100% sure. Anyway, carry on.
Nick von Westenholz: We do that with difficulty because the main bit of our recommendation in the TAC was around negotiating these principles into an FTA. If they are not in the terms of the FTA, it becomes much more difficult to exercise these sorts of controls. It is possible. There are developments in world trading rules about how you might try to impose controls around the environment and animal welfare, but it is much easier to do it in an FTA when you are agreeing those terms. It is a missed opportunity.
But I absolutely agree with one real issue at the heart of this. If we do trade deals like the ones we are expecting to come forward first and essentially open our markets, they will require UK farming to improve its competitiveness, which we would love to do. Measures are coming forward in the discussion with the Government about how to improve productivity and competitiveness. We would love to grow our markets overseas and export more. We are doing lots of work around that and having lots of discussions with the Government. Ultimately, you are being asked to go toe to toe with some competitive producers overseas, yet at the same time, as you have set out, domestically those regulations and standards are becoming more onerous and more costly and potentially pulling farmers in the other direction.
At the heart of this is a problematic tension. There seems to be a total lack of coherence and joined-up thinking between that trade policy and then the domestic policy around some of these standards issues.
Q219 Neil Parish: It is a complete myth that we cannot sign a trade deal with Australia and New Zealand where we can maintain our high standards and they can produce to the equivalent of our standards, put that production into our trade deal and send that here because we have laid down quite clearly what it is before it is sent. Therefore, it would not be lambs from mulesed sheep, they would have to look at their transport regulations, and all these things, and bring that production to this country. That is what happens in many deals that are done by many countries across the world, so why on earth can we not do that?
Nick von Westenholz: To an extent, you can. I expect that the Australia deal will not have something in it that says that practices banned here, like using hormones in beef production, will be allowed in imports of Australian beef. That will continue to be restricted because that is our domestic arrangements.
Q220 Neil Parish: We are not going to skin our sheep, are we? The moment we skin our sheep, the farmers will be skinned by the public, seriously. I am quite excited about this because it is a double standard. There is no way that we should allow that meat in from sheep that have been skinned.
Nick von Westenholz: Exactly. This is the important distinction. You can justify those bans as they currently exist in UK law because they are health bans. They are bans on the basis of the safety of the product coming in. There is an argument about whether using hormones is safe, but that is why the ban exists. The problem is that issues like mulesing or deforestation in Australia to make way for its cattle farming are not SPS issues. You cannot ban a product on those production methods in the way you can with the use of chlorine in chicken production or whatever.
That is why we have to be careful with the language used around this by the Government and others when they talk about maintaining our standards or not allowing food produced to lower standards. As Henry was saying, what standards are they talking about? What standards of production are they referring to? On those safety issues, fine, we do not have any concerns that those controls will be able to be maintained. It is the production standards issues.
Q221 Neil Parish: Henry, how do we get the message out there about what is happening in these countries that we are potentially trading with that not only puts us at a disadvantage with our farming but hugely downgrades animal welfare?
Henry Dimbleby: One of the problems with the campaign and the discussion on it was that politically it became quite farmer-centric. It looked to a lot of people who were not farmers like a protectionist campaign. We need to move the argument away from the protectionism towards creating a set of environmental and animal welfare standards that we are comfortable with. Once we have done that, the mechanism is fairly straightforward. For example, as you know, if we want to export organic milk to America, we have to be accredited to their standards because they allow no antibiotics in their organic herds. If we want to import beef from the US, it has to be accredited to be able to come into the UK. The mechanism is there.
Our market is one of the most attractive markets for food in the world and it is about having that joined-up consideration across the Government where this is one of the mandates for the trade deal. There are signs of movement. The Prime Minister is saying he wants to make the US trade deal a good one rather than a quick one. We have a new Permanent Secretary and a new Secretary of State in Trade. I hope we can see a bit of movement towards something that is more in line with the Tory party’s manifesto as we move towards the trade deals.
Chair: All we need are the lorry drivers to move the food around the market at some stage. I want to make a quick judgment call here. I am anticipating the types of questions that colleagues will ask, so therefore I will take a brief question from Mark Hendrick before I go to Anthony Mangnall.
Q222 Sir Mark Hendrick: On Neil’s point and the interesting comments from the panel, if we have a set of standards that are different and yet we have signed this trade deal already, more or less, how could we possibly enforce it? We already have problems about processed food and the fact that chicken from Thailand or wherever can be put into some ready meals and we could be consuming it even though we do not know anything about it. Could it be the case that food produced to lesser standards can still get into the food chain in this country because we do not have the mechanisms to oversee it and enforce it?
Nick von Westenholz: There certainly would be a risk of that, but you would look to find ways of the market driving the accreditation processes and certification processes that allow or provide the mechanisms for exporters from Australia or wherever to demonstrate that they meet standards. At the moment, for example, the small volume of beef that is sent from Australia to the UK is hormone-free and they have hormone-free lines that are used for export into the EU market because hormone-treated beef would be illegal to export. They have created the supply chains that can meet the requirements of the importing markets.
It is a risk, of course, but you need to have a system that says, “If you want access to our highly valuable market, you have to demonstrate you meet those standards. A failure to demonstrate that means you cannot access the market.” Then the market will find a way of demonstrating it.
Q223 Sir Mark Hendrick: You have to police it, though, don’t you?
Nick von Westenholz: Yes, of course, absolutely, and controls at the border would be important.
Henry Dimbleby: Funnily enough, that is easier done within an FTA, as Nick referenced earlier, than outside one. I am sure a number of Members know the fight over hormone beef. When the EU banned hormone beef, the US challenged that at the WTO because it was a production method. In the end, the grain-fed beef quota was negotiated. The US was going to force us to accept its hormone beef because it was not subject to WTO regulations and then we scrambled to negotiate a deal with a quota. Inside, because you are opening yourselves up and giving the other party something, you can be much more specific about what you want to give in return. It is easier to do that within an FTA than outside an FTA.
Q224 Anthony Mangnall: I am interested in how the private sector plays a role in this. Frankly, I think Waitrose, Tesco, Aldi and all the others would be loth to start selling poorer quality, poorer animal welfare standard beef, pork or whatever it may be.
Neil Parish: That was my next weapon, Anthony.
Anthony Mangnall: There we are. That definitely has to be a consideration, but it is important also to make the point that the new quota of beef will be 170,000 tonnes in 15 years’ time. That will still have to adhere to SPS standards. But if there is no consumer market to buy that, it will presumably change. I am interested in hearing your thoughts on how the private sector might be able to play a role.
Then, slightly going back to the point that Mark was making, if we are at the top of our game and we are trying to do trade deals with other countries, there has to be compromise somewhere. Can either of you add a view on the idea that signing a trade deal with Australia will actually result in it upgrading its standards? Even if we do not have all the nuts and bolts that we want in it, does either of you think that Australia will go, “Actually, do you know what? We really do want to match out standards to the UK, we do want to produce in the same way and we want to end” the techniques that you were mentioning earlier?
Chair: A push-pull on Australian agricultural production. Is that basically what you are thinking of?
Anthony Mangnall: Yes.
Nick von Westenholz: To the second one, not necessarily. It may happen, but you have given market access without contingencies around standards and they are able to produce cheaply, which they are, and there is a market here and the private sector is bringing Australian products in. Remember the point I made earlier: a lot of food is eaten outside the retailers. What the supermarkets do is important but not the last word. A lot of that will be aimed at the out-of-home sector. If they are doing that, why would they change the standards if they can export into the UK within their current standards?
Q225 Anthony Mangnall: If Neil's campaign were to happen and suddenly 170,000 tonnes of Australian beef is not being sold in the UK, the producers in Australia will say, “Hang on. We started at just under 4,000 tonnes. We now have this enormous quota. We are not matching it. We clearly have to find a way in which we can sell our produce into the UK market.” A thought process here would produce, hopefully, a change of attitude on their side. Am I being naive?
Nick von Westenholz: It is certainly possible, but the price is still incredibly important and they will be looking to compete on price. If the question comes to them that they have to up their production costs to access that market, the market may become less attractive to them. This is a difficult game because we are looking 15 years into the future and all sorts of variables may occur over that period.
Henry Dimbleby: On the private sector, I remember talking to Justin King, the former CEO of Sainsbury’s, as part of the research we were doing on the food strategy about labelling. He said that the only label that shifts consumption is a Union Jack on the packet. The customer spots that and cares about that. A lot of the other labelling makes us change our behaviour—with a lot of the nutritional labelling, we will change our recipes—but the thing that the customer notices is the Union Jack.
I think you would find a certain level of protection in the supermarkets just because of that factor, but I am not sure that will be the case in the ready meals in supermarkets. I think it is different when you are buying a piece of meat from when the meat is in your rogan josh or whatever it is. As Nick said earlier, we eat about 40% of the meat we consume out of home. I would be surprised if a company like McDonald’s moved away from Irish and British beef. A lot of the out-of-home sector, where price competition is ferocious, would buy the cheapest stuff. If you look at the quotas coming in from Botswana and other African countries, they all pretty much go into the food service sector at the moment. That would not be protected if we did a deal with Australia. I cannot see any commercial rationale for those companies not to buy the cheapest.
Chair: I was smiling at my colleague Paul Girvan about the idea of flags on food. McDonald’s perhaps could have a Union Jack and a tricolour on the other one.
Paul Girvan: No, definitely not a tricolour. Keep your Union Jack.
Q226 Chair: I was thinking it might be a step for peace, but clearly not. We will move swiftly on. Apologies, Paul.
On the reports you have done, what were the key trade-related points you would like to see from the Government’s response to your work? What do you hope the Government pick up, take and run with from the work you have both done?
Nick von Westenholz: We come back to that core standards bit because it is clearly critical to FTA negotiations. Even if we have missed the opportunity with Australia, and perhaps with New Zealand, we are doing a number of future FTAs where we could maybe bring in that approach. But also it is—
Q227 Chair: You said something quite important earlier on that you slipped in quite quickly. You said that giving access to New Zealand and Australia to the market might make it more difficult because, when the next lot is coming in, they already know the New Zealanders and the Australians are in.
Nick von Westenholz: It is less valuable. Yes, there is less value in the market access. But the other point about the core standards is that it would be an important and useful process for the Government, stakeholders and, frankly, the public to go through. We have been talking about this for a long time. The Committee has been talking about this for a long time. Still we come back to this question of what exactly we mean by “our high standards”. What are we referring to? What is valuable in our standards and what is not? We hear the Government make statements that are still very general. Going through the process of establishing those core standards not only facilitates how we approach FTAs but is a useful process for us as a country to decide what is valuable and what is not and then also to focus on what is valuable about UK farming, how we can compete overseas, our USP and some of those issues as well.
Chair: Great lamb from Scotland—and Devon, of course.
Henry Dimbleby: We recommended things in three areas. We have said a lot about standards. That is one area where I would like to see the Government move swiftly.
On assessment of deals, when the Trade and Agriculture Commission is put in place and assesses deals, we will have stronger assessment than Australia, New Zealand, Japan and Switzerland—not quite as strong as the US or Canada, but pretty robust.
The other area is parliamentary scrutiny and approval. At the moment, we are using CRaG as our mechanism to scrutinise trade deals; only New Zealand has weaker parliamentary scrutiny. To give an example, the Australian Parliament spent two days of debate on TTIP. Canada spent 21 days debating CETA. It would be good for the Government not to have an amendable Bill, because you cannot do that with a trade agreement—even Congress does not do that—but to formally set aside time for the Select Committees to scrutinise the deals properly and to have some debate in Parliament on the deals.
Chair: Excellent. That is good to hear. The answers have been so good that there is some interest.
Q228 Anthony Mangnall: I am just wondering if there are any examples. You say they are not amendable, but have Australia, Canada or New Zealand ever changed anything in the course of one of their debates, just as a bit of trivia for us?
Nick von Westenholz: Most of them have, at best, a yes/no vote at the end of it, so none of it is amendable. But in the actual process, if you have a yes/no vote at the end, it essentially pushes the Government negotiators to involve Parliament much more readily throughout the negotiating process and to flag any potential issues that Parliament might not like. By the time you get to the end of that debate and the yes/no vote, you should pretty much have a deal that Parliament will be satisfied with. Having a yes/no vote forces you into that position.
The problem at the moment is that without that scrutiny at the end of the process, Parliament can remain largely blind to the deals and the negotiations. This Parliament has ratified over a dozen free trade agreements in the last couple of years. You debated one of them, the Japan deal, but you ratified under the CRaG process all of those trade deals without even knowing about it.
Q229 Anthony Mangnall: Do not let the fact that you are in front of us influence your answer to this question, but do you think the International Trade Committee should be given more power in its ability to be updated, be informed and discuss ongoing trade deals?
Nick von Westenholz: Yes, I do.
Q230 Mark Garnier: My whole question is about this particular point. I know it has to be re-exercised indefinitely, but can the CRaG process stop a trade deal?
Nick von Westenholz: It can. It is clunky. It would have to be reset every 21 days. It does not stop it. It delays ratification every 21 days.
Q231 Mark Garnier: Can it be permanent?
Henry Dimbleby: Not necessarily. The motion has to be moved. Unless the Government moves the motion, it has to come on an Opposition debate day. There are only 20 of those a year. It is possible to foresee a situation where a 21-day period passed between those days. Jack Straw introduced CRaG because he, as Foreign Secretary, was horrified by how easy it was for him to ratify treaties without even bringing them to Parliament. It was done at a time, as I am sure you will know, when we were in the EU, so he had not even considered that it would be used for trade treaties. It is a clunky piece of legislation. It is not clear that you could not, if you really tried, get a treaty through and get it unblocked.
Q232 Mark Garnier: Going back to a couple of the other points, I can see the value of the idea that you could have ongoing debates in Parliament about a trade deal, but I can also see that you could end up having trade negotiations by committee. You could end up with 200 or 300 trade negotiators going over there, doing all their stuff and going back and Parliament passing judgment on it, and then it keeps going back. You could end up never getting there on that process.
Nick von Westenholz: I would not suggest you have ongoing debates during the negotiations. Something like this Committee, for example, could take evidence from negotiators, even in private if that was necessary, because there are sensitivities involved. The Committee would also be able to take the views of Members in a way that they could then have a frank discussion with the negotiators about what they are hearing, where they think things will be difficult and where they think things will be good and the negotiations should press on. It would be a more iterative process in that sense rather than Parliament having votes throughout the process.
Q233 Mark Garnier: Let me also challenge you on the final debate. You are absolutely right that the only deal we debated was the Japan trade deal. Did you watch that debate?
Nick von Westenholz: Yes, bits of it.
Mark Garnier: Was it not astonishingly lightweight? This is not meant to be a critique of my colleagues, but there is no doubt that these trade deals are ferociously complicated. We had 14 days to go through 67 chapters. Three or four of them were on analysis comparing the EU-Japan trade deal and all this kind of stuff, and 64 chapters were on the minute detail.
While I am on my soapbox, it is an outrage that in Parliament we are now restricted to three or four minutes if everybody wants to speak on these trade deals, which means that we do not have any debate. We merely have people coming along and spurting out a series of words, which nine times out of 10 are repeating the previous 20 debates and do not add anything whatsoever. To have a proper debate, you need to have an awful lot of highly informed people on all the minutiae of these deals. It is difficult to get a debate.
This is not to say it is the wrong thing, but in any practical sense do you think Parliament is equipped to do that?
Chair: That is a good question, politely asked, but please be blunt on this. You have observed what Parliament has been able to give, and you two in particular are probably among a small percentage of the population that has paid real attention to this sort of stuff. Please be as blunt as you want.
Nick von Westenholz: I would not take issue with anything you have set out there. It is essentially right. I maybe hope, however, that by giving Parliament a fuller role, you build some of that expertise and knowledge. At the moment, it is easy for parliamentarians to dip in and out of this in the way you have described because it is happening anyway. We have struggled a great deal to talk to parliamentarians and to brief them on the issues and the impacts. Frankly, it will happen anyway. The deal is on its way and it will be signed, so engagement is limited. If you involve Parliament more, it must be a good thing. These trade deals will be critical to businesses in the UK and to people in the UK.
Q234 Chair: Would you involve Parliament at the beginning? People like you have an idea of the next country, whichever it is, the UK is about to start negotiating with. Should Parliament have a debate early on so that people like you will be engaging with the constituency MPs and the spokespeople MPs of the various parties? Is there merit in Parliament starting to think about this in the beginning, rather than hearing a slow rumble coming down the pipeline of a trade deal coming their way that may affect the good people of Northern Ireland, the good people of Liverpool or the good people of Devon later on?
It seems that there is something happening in New Zealand at the moment. I do not think Parliament is aware of that. There is something coming from Australia that we are a lot more aware of. If the New Zealand one follows in quick succession, with the work that we have to do, it will be difficult for us.
Nick von Westenholz: Our suggestion has been that the negotiating mandate at the outset is put before Parliament and Parliament can have a vote on that, which would then provide the opportunity to understand the objectives, get any of those issues out into the open, discuss them and also push back and say, “These should be the priorities”, or whatever. You have a mandate at the beginning and after that you simply have the process where the negotiators keep Parliament updated and a yes/no vote at the end.
Q235 Mark Garnier: It is interesting that you make that point because surely, at the end of the day, we should have a trade policy with that template mandate for every single trade deal we have. By the way, when we start talking about the minutiae of these deals, it is great to have you here, Neil, but every single Select Committee has a relevant interest in this. The DCMS has data. They need to be helping with this.
The conclusion of this conversation is that we do not have a good process either of setting the policy or, indeed, of scrutinising that non-existent policy. Henry, you have not said anything.
Henry Dimbleby: First, I agree with you. There are good reasons why all states leave negotiation of treaties to the Executive and have done for time immemorial. You cannot have a negotiation with a committee. Regardless of the ability of Parliament to get into the detail, having parliamentary scrutiny and the yes/no vote at the end of the process strengthens the hand of whoever is negotiating. I cannot see harm in it.
On our process not being particularly fit for purpose, it is not, but we are just starting. If you look at what has happened since the transition period ended at the end of 2020 and we went into the pandemic and so on, it is not surprising. There has been a lot on. My concern is that each of these deals lasts for 25 years plus. Therefore, we will not cause ourselves immeasurable economic harm by slowing down a bit and getting it right and thinking a bit.
Mark Garnier: We have done 67 of these deals so far.
Henry Dimbleby: Those were slightly different things.
Mark Garnier: They are not, actually. You are right; they are continuity deals—the intention was to give continuity for the people trading with this country from one system to the next system—but they lock it in for a long time, and these are the countries that are more interesting. Well, we have not done one with America yet, but these are the more interesting countries. Sorry, I was correcting you on a point.
Chair: I am quite aware of time and I know that we have kept Henry longer than we agreed, but I will let Anthony in on one final point and then we will finish.
Anthony Mangnall: Whether they are continuity agreements or new ones, one problem is that we also view trade deals as static. They do evolve over time and they have the potential to evolve over time, which has to be taken into consideration. I absolutely agree with everything you have said about scrutiny, not least because it gives this Committee more power, but it is necessary. We have to look at those Commonwealth countries that do a better job. Canada is certainly one of those on the list. But I wanted to put on the record that point about trade deals evolving and getting them into better shape and having the opportunity to try to improve them as we go along. That is it.
Chair: Very good. Neil Parish wanted to come in briefly.
Q236 Neil Parish: I want to take up what Mark Garnier said. The whole idea on food and animal welfare was to have the Trade and Agriculture Commission advise Parliament as the deal was going through and being negotiated. That is why it is so important.
Nick, do you consider that the new Trade and Agriculture Commission will have the right expertise to look at trade deals? Mark is quite right that they are highly technical, but the whole idea was to give advice to us in Parliament. If only the Government would take Parliament with them more, they would have far less trouble and far less opposition from the public as well. At the moment, they are just hellbent: “We are the Executive. We will rule. Parliament will not stop us.” All Governments are the same, so I get that, but we have not done trade deals for 45 years and we need to scrutinise them. Where do you see the new Trade and Agriculture Commission? It has not been named but it is there, I believe. Where are we?
Nick von Westenholz: Under the statute, it will report after the deal has been signed and the text made public but before ratification, so within that CRaG process. That is probably not as good as if it was able to report, or at least able to make interim reports, earlier on, but it would provide the opportunity for Parliament to take on board its recommendations or its opinion prior to final ratification. Having the sort of scrutiny process we have just talked about would be much more effective with a yes/no vote at the end and more involvement for the Committee during it.
Q237 Anthony Mangnall: Can I be clear? Is the statutory TAC set up?
Nick von Westenholz: It is in the process of being set up. I understand that it is almost there ready but there has not been an announcement yet.
Neil Parish: To be blunt—Nick does not want to say too much—had there not been a change in Secretary of State, it would have been announced this week. But I accept that the new Secretary of State quite rightly wants to do some final checking on it.
I know that it happens in the CRaG process under TAC, but of course once it is statutory and once it is there, the Government will not want to fall foul of that in its negotiations when it grants its final deal. I believe it will have the right effect—not the total effect we may want, but it will give us more scrutiny and, hopefully, more technical advice. I take Mark’s point: we need technical advice.
Q238 Chair: We might have you as a witness next time, Neil. I have a final question—it is a good point that has been raised by some on our research team, notably Tony Heron—on the US-Mexico-Canada agreement. What were your reactions today? It seems to me that it has jumped a few places. I am not exactly sure where it is, but there were some claims against assurance of food standards and so on. What are your views on NAFTA 2.0?
Nick von Westenholz: I was surprised to hear the suggestion that the UK will be acceding. There is no protocol within the USMCA for new countries to accede anywhere. We will wait to hear further details to find out whether or not that is a genuine aspiration of the Government.
Q239 Chair: It just so happened the Prime Minister was in North America, perhaps, or one of those three countries. Henry?
Henry Dimbleby: I don’t have anything to add to that.
Chair: Excellent. On that happy note, we will bring it all to an end. Thank you all very much.