In response to a UK Government white paper on internal markets, the Farmers’ Union of Wales has stressed the importance of protecting Welsh farmers against unfair competition from other parts of the UK and countries across the globe, and that Welsh devolution must be respected.
In his introduction to the UK Internal Market White Paper, Alok Sharma MP, Secretary of State for Business, Energy and Industrial Strategy, highlights how increasing differences between rules and standards applied by different Governments in the UK’s four nations after Brexit could cause market distortion, discrimination and unfair competition for businesses in a way not seen for hundreds of years.
The White Paper therefore proposes measures to prevent such impacts based on the principles of ‘non-discrimination’ and ‘mutual recognition’
FUW Head of Policy, Dr Nick Fenwick said: “We are glad the UK Government has woken up to the need to take this issue seriously as it has previously been kicked into the long grass because it is so politically contentious.”
Dr Fenwick said that the FUW had been highlighting the need to address this issue since the EU Referendum in 2016, and in July 2018 the FUW had published a detailed paper considering the matter entitled 'Filling the Void - Steps towards a post-Brexit UK policy framework'.
“While we welcome the UK Government’s recognition of this issue, we are extremely concerned at the suggestion that rules could simply be dictated by London, rather than there being a means by which to reach agreement between UK Governments.”
Dr Fenwick said such a move could undermine devolution and work to the disadvantage of Welsh farmers.
“The consideration of such matters in a White Paper within months of the end of the Withdrawal Agreement period gives us very little time to hold proper detailed discussions and introduce the type of structures and bodies we truly need to make recommendations, enforce regulations, arbitrate on matters etc. in a way that is fair.”
“It also gives us very little time to sort out what are huge constitutional issues which also happen to be crucial to the running of Welsh businesses,” he added.
In response to the White Paper, the Union further stressed that while the UK Government is right to recognise the dangers of direct and indirect discrimination, unfair competition, market distortion and other issues that could arise within the GB/UK internal market, it should also recognise that the same issue exists across international borders.
“Given the current trade negotiations with the EU and USA, for example, the UK Government should also recognise the likelihood of such adverse impacts occurring as a result of inappropriate or ill-considered trade deals which expose us to different standards or unfair competition,” said Dr Fenwick.
“This is a particular concern with regard to agricultural produce produced to environmental, health and welfare, social and other standards that do not meet those required of UK producers, and subsidy and support regimes that differ significantly to those introduced in future in the UK's four nations.”
At present, while significant differences between the UK and the EU is allowed under Single Market, Common Agricultural Policy and related rules, these are within strict boundaries aimed at minimising market distortion and unfair competition while recognising regional and national needs.
If a trade deal with the EU is reached, there is potential for market distortion and unfair competition for UK producers as a result of the fact that the EU will continue to pay farmers direct support, but Wales and England want to move over to environmental ‘public goods’ style payments - with many lobbying for farm payments to be cut altogether.
“The EU's reaffirmed commitment to maintaining direct support for active farmers through CAP payments, coupled with a move in Wales and other parts of the UK to get rid of direct farm support in favour of environmental payments, would clearly introduce the kind of unfair competition the UK Government refers to in this paper.
“This danger is no different in principle to the dangers recognised in the Internal Markets White Paper, so also should be recognised by our Governments - not only in the context of unfair competition from the EU, our most important trading partner in terms of food, but also countries like the USA if we are to strike a deal with them.
“We need a trade deal with the EU to avoid massive damage to farms and other businesses, but we also need our governments to recognise the self inflicted damage that could be done by radically changing our own farm support systems while our main competitors twenty or thirty miles away over the sea continue with direct farm support,” he added.