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L a s t u p d a t e – J a n u a r y 2 0 1 8
Annex 1: Hard Brexit Scenario
On 29th March 2019, the United Kingdom will leave the European Union. Even considering the progress in the negotiations, the possibility of a ‘no-deal’ scenario still threatens the future relationship between the EU27 and the UK. If the UK leaves the EU Single Market and Customs Union without any fall-back position or transitional period, this would be detrimental to both the UK and EU27 dairy sector. To understand the full effect of a hard Brexit on the EU27 and UK dairy sector, we considered several aspects of the UK-EU27 relationship.
Consequences of a “no-deal” on dairy trade
A hard Brexit would include the implementation of tariffs between the UK and EU27. Negotiations towards a most comprehensive free trade agreement should be prioritised by both parties to facilitate the free flow of goods. Any implementation of tariffs would be detrimental to the EU and UK dairy sectors and would be reflected in the raw milk price paid to dairy farmers.
How much product is exported to the UK?
Table: UK-EU27 trade balance (2016, in tonnes)
CN code IMPORT into the UK of EU27 dairy products
EXPORT of dairy products from the UK
to the EU27
0401 Milk and Cream 144,174 619,392
0402 SMP-WMP-Concentrated 107,211 97,682
0403 Buttermilk, yogurt 346,767 37,279
0404 Whey, milk constituents 59,590 33,007
0405 Butter/ Butteroil 151,645 88,461
0406 Cheeses and curds 466,091 125,558
1702++ Lactose and Lactose Syrup 12,366 22,203
3501 Casein(ates) 5,179 256
3502 ++ Milk albumin 13,539 5,425
3504 MPC 7,706 656
By milk equivalent cheese and curds (CN code 0406) are the most important dairy products exchanged between the EU27 and UK. In 2016, more than 466 thousand tonnes of EU27 cheese and curds were exported to the UK. In milk equivalent1, this amounted to more than 3.88 million tonnes of milk. This would be roughly equivalent to the amount of milk deliveries in Austria (3.092 million tonnes) or Belgium (3.875 million tonnes).
Russian Ban
In August 2014, the Russian authorities imposed a ban on the importation of EU milk and dairy products along with other agricultural products. This was also applied to US, Australia, Norway and Canada. Before 2014, the foremost importer of EU cheese was Russia. 1/3 of EU cheese and butter exports went to Russia and EU exports to Russia represented 4.2% of all EU agri-food exports. Specifically, in 2013, EU exported more than 256 thousand tonnes of cheese and curd (CN 0406) to Russia (more than €983 million).
1 Milk equivalents (MEq) have been calculated by using the non-fat solids method. The equivalent factor for cheese is 8.3333.
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Below are two graphs2 comparing on one side, EU27 exports to Russia and to United Kingdom, and on the other, UK exports to Russia and to EU27 for the year 2012 and 2013, prior to the Russian ban.
In the first graph, we see that the exports of EU27 to UK of Buttermilk, yogurt (CN code 0403) is 11 times the export of EU27 to Russia in 2013 and for Cheese and curd (CN code 0406), EU27 exports to UK were double those of exports to Russia. In the second graph, the UK had few exports to Russia, with for instance 135 tonnes of MPCs (CN code 3504) exported to Russia whereas to EU27 it amounted to 512 tonnes.
The direct and indirect effects from the Russian ban, along with a diminishing world demand, initiated the one of the most challenging dairy crisis which the dairy sector is still facing the effects of. As shown above, the EU27 exports to Russia were much lower than EU27 exports to the UK. Knowing the amounts of milk and dairy products traded daily, the European Dairy Industry sees a potential implementation of tariffs between the UK and EU27 as a threat to the UK and EU dairy sector.
Implementation of WTO tariffs
The no-deal scenario would involve the implementation of WTO tariffs at the border between the EU27
and the UK. If UK-EU27 trade continues at the level of 2016, it is estimated that UK importers would
need to pay more than €1.7 billion in duties to import EU dairy products. Likewise, the EU27 importers
would need to pay over €660 million in tariffs to continue importing from the UK.3 If UK consumers wish
2 Full data in annex 3 Based on 2016 trade figures. The tariff calculation was based on volume and value traded for the CN codes mentioned in the annex. The extra Agricultural Element was not considered in this calculation.
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to continue to buy EU27 products they would need to pay approximatively €18 more per year per
capita. Similarly, this would be €1 per EU citizen.
With this increase in price, consumers would start to buy different products of different origin that would
replace EU27/UK products in the supermarkets.
Considerations on transports and freights4
According to the UK Chamber of Shipping, the total ferry traffic freight volumes for 2016 amounted to 8,000,000 freight units for all goods traded. The breakdown was:
Number of freights
(2016) Number of sailings
per day Trucks carried (2016)
Dover Strait 2,600,000 by ferry 1,600,000 through
tunnel 52 (Dover)
2,591,286 (Dover) 1,641,638 (Channel
tunnel)
Dublin corridor 430,000 via Holyhead 390,000 via Liverpool
20 (Holyhead) 428,623 (Holyhead)
Humber 1,000,000
Thames 550,000
Harwich 350,000
Portsmouth 250,000
As shown above, the two routes (Dover Strait and Dublin corridor) are the biggest freight routes, with respectively 7,000 and 1,175 trucks transported per day. In some cases, the final destination of these freights are not the UK or the EU. On disembarkation, if the lorry is not pulled aside, there is a free flow from ship’s ramp through the terminal to the dock exit. After Brexit, if we consider that a border will be created between the UK and the EU27, comparable to borders between the EU and third countries, all products of animal origin may enter the EU only via a Border Inspection Post. In order to export, companies would need to pre-notify cargoes and, at port of entry, these cargos would be held until released by the Border Inspection Post. Currently, there is no border inspection posts at the following ports Calais, Channel Tunnel, Hook of Holland, Caen, St Malo and Rosslare. Furthermore, these facilities do not offer at the moment any parking space and examination buildings large enough to tackle the numbers of freights currently traded. If we consider only the trade in liquid milk and cream (CN code 0401), 619,392 tonnes were exported from the UK to the EU and 144,174 tonnes were imported into the UK from EU27. It is important that no delays happen during the ferry terminal process, as these products are perishable. Furthermore, freights move back and forth daily between Northern Ireland and the Republic of Ireland. These intra and inter- company movements have been developed over time which creates an all -island value chain for dairy. If borders appear between the two, it would have a disastrous effect on the dairy industry in the Island of Ireland, and directly and indirectly on the whole dairy supply chain in EU27 and UK.
4 All freight figures are from the UK Chamber of Shipping
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Adaption to new rules and regulations
If regulations between the EU and the UK diverge in the long term, the adaptation of each product for the ‘other’ market (EU to UK and UK to EU) would be burdensome for companies. Companies would need to differentiate and adjust production lines. Stricter rules would result in non-tariff barriers and would limit the trade of dairy products and as such decrease the availability of dairy products for consumers and the secondary processing industry. For instance, the definition of added vitamins and minerals, possible claims, allowed additives and contaminants, or the composition of infant/ sports foods could be different. Each product crossing the border would need to be adapted to national requirements, or if an equivalent agreement existed, it would be checked by the import authorities and possibly placed into quarantine, etc. For claims and other assessments, an agency would be needed and the dossiers would be doubled for EU and British markets. Changes would inevitably have a cost, on the budget and human resources for businesses which - in the short run - will lose money in order to adjust their business models to new regulations, whether at the production or distribution level.
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Appendix: Data (in tonnes)
EU27 Exports to
CN code Russia UK
2012 2013 2012 2013 0401 Milk and Cream 29,025 37,955 246,077 301,053
0402 SMP-WMP-Concentrated 13,476 26,333 122,998 125,686
0403 Buttermilk, yogurt 23,645 29,595 328,518 328,759
0404 Whey, milk constituents 19,483 27,396 29,454 30,851
0405 Butter/ Butteroil 28,117 35,190 103,022 98,395
0406 Cheeses and curds 245,786 255,049 429,391 458,120
1702++ Lactose and Lactose Syrup 10,735 10,214 10,084 7,957
3501 Casein(ates) 2,033 2,351 5,336 4,775
3502 ++ Milk albumin 166 329 5,475 7,490
3504 MPC 8,775 6,717 8,512 8,982
UK Exports to
CN code Russia EU27
2012 2013 2012 2013 0401 Milk and Cream 11 0 615,272 572,162
0402 SMP-WMP-Concentrated 0 322 41,226 51,077
0403 Buttermilk, yogurt 0 0 38,908 34,493
0404 Whey, milk constituents 0 73 53,866 43,981
0405 Butter/ Butteroil 80 150 88,907 87,338
0406 Cheeses and curds 637 1,598 111,206 109,653
1702++ Lactose and Lactose Syrup 0 100 11,401 15,806
3501 Casein(ates) 0 0 516 515
3502 ++ Milk albumin 0 0 2,435 3,380
3504 MPC 197 135 416 512
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Annex 2: EDA Issue Paper
“A Dairy Position for the Island of Ireland & Brexit”
There is a long history of facilitating the free movement of people, goods and services within the United
Kingdom (UK) and the Republic of Ireland (RoI), and, in particular, on the island of Ireland between
Northern Ireland (NI) and the RoI.
As a consequence, business, political and social relationships have evolved to the benefit of citizens
throughout the UK and the RoI. The challenge, in the context of the UK leaving the EU, is to ensure
that the benefits of these long-standing relationships are maintained, especially in the area of business
relationships, which add considerably to the economic wellbeing of citizens of both the UK and the RoI.
The dairy industry on the island of Ireland acts as a single entity, facilitated by the free movement of
milk, product and staff. These intra and inter- company movements have been developed over time, in
collaboration with authorities in both jurisdictions, driven by the need to generate efficiencies, improve
productivity and add value, and facilitated by common EU standards, labelling and free movement of
product and people. In essence, what has been created is an all island value chain for dairy, which
operates to the ultimate benefit of dairy farmers, companies and the overall economy in both NI and the
RoI.
Dairy on the island of Ireland has emerged in recent times as a key economic driver for both parts of
the island, and is a sector that serves as a key supplier and customer of Great Britain (GB).
The Agreement of December 8th 2017 between the EU & the UK provides a welcome step towards the
maintenance of ‘regulatory alignment’ not only on the Island of Ireland, but also East West between
Ireland and the Britain.
Asks:
An adequate transition period to be agreed between parties to facilitate the continuation of a two-way
access for raw milk and dairy ingredients. This two-way access should be maintained between Northern
Ireland (NI) and the Republic of Ireland (RoI), without tariffs and free from burdensome non-tariff
administrative measures – including all veterinary, SPS, customs and labelling laws.
Finished products should come under the terms negotiated between the EU and the United Kingdom
(UK) in relation to the movement of finished goods and services.
EU, UK and Irish recognition that common standards be applied and adhered to on dairy products
produced on the island of Ireland. Any future amendments to common EU standards should be fully
implemented by authorities in both jurisdictions.
Based on:
The legal transposition of the Dec 8 agreement agreed by the UK and EU on the island of Ireland as
per Articles 44 to 56.
Internationally binding Good Friday Agreement, together with other existing international law and
precedents.
Existing “island of Ireland” recognition for Irish Whiskey, Irish Cream Liquor & Poteen.
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Annex 3: EDA Issue Paper
“Rules of Origin”
Rules of origin are the criteria used within WTO to define where a product was made. They are used:
• to determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment
• to implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures
• for the purpose of trade statistics
• for the application of labelling and marking requirements
• for government procurement.
The WTO Rules of Origin Agreement requires WTO members to ensure that their rules are transparent; that they do not have restricting, distorting or disruptive effects on international trade; that they are administered in a consistent, uniform, impartial and reasonable manner; and that they are based on a positive standard (in other words, they should state what does confer origin rather than what does not).
In the case of Brexit, the United Kingdom will become a third-country where rules of origin will apply for
trade between the UK and EU27, whether as part of the WTO agreement on rules of origin, or a FTA
between UK and EU27.
Until a trade agreement is settled between the EU27 and the UK, trade would be conducted on a most-
favoured nation basis where non-preferential rules of origin will apply1. (In the Agreement on Rules of
Origin, WTO members agreed to negotiate harmonized non-preferential rules of origin. These
negotiations have not been concluded).
In the Commission regulation (EEC) No 2454/932 laying down provisions for the implementation of
Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, to obtain origin
under Chapter 4, the product must be manufactured in which all the materials of Chapter 4 used are
wholly obtained; and the weight of sugar used does not exceed 40 % of the weight of the final product.
The Commission is faced, in their FTA negotiations, with different positions from third countries.
Generally, the EDA is of the position that a common threshold for all FTA negotiations should be
pursued. However, Brexit is a special case, and since the EU and the UK today share common rules,
the EDA is of the position that the future trade relationship between the two parties should be kept as
close as possible to the situation prevailing today.
This would imply that the EU and the UK agree to a cumulation for EU–UK dairy trade intended for
export. For import to the EU/UK the two parties would maintain common rules, leaving the situation as
today. The UK (and the EU) would, in its future FTA negotiations with third countries, need to make
sure to have the EU/UK cumulation recognised by these third countries, as well as setting uniform
external rules.
The EDA in general believes that creating special rules for each FTA should be avoided, as it makes
business life complicated, so, as mentioned above, the future trade relationship between EU and the
UK should be addressed accordingly. Therefore, in the case of a free-trade agreement being discussed
between the parties, EDA is of the opinion that the rules for internal EU/UK trade should be subject to
1 See appendix below for more information on definitions 2 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1993R2454:20140101:EN:PDF
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cumulation and the following rules of origin should apply both by the EU27 and the UK towards third
countries.
The percentages given below constitutes the limits on non-originating material from third countries.
HS code (please see Nomenclature for more information)
EU (Generalised system of preference)
EDA position
Chapter 4 Manufacture in which: — all the materials of Chapter 4 used are wholly obtained; and — the weight of sugar ( 1 ) used does not exceed 40 % of the weight of the final product
Manufacture in which: — all the dairy materials of Chapter 4 used are wholly obtained, — all the fruit juice (except that of pineapple, lime or grapefruit) of heading 2009 used is originating, and — the value of all the materials of Chapter 17 used does not exceed 20 % of the ex-works price of the product
1702.11 1702.19
Manufacture from materials of any heading, except that of the product, in which the weight of the materials of headings 1101 to 1108, 1701 and 1703 used does not exceed 30 % of the weight of the final product
Material of Chapter 4 wholly obtained
1704 Manufacture from materials of any heading, except that of the product, in which: — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
Manufacture from materials of any heading, except that of the product in which: - the individual weight of sugar does not exceed 40% of the weight of the final product - and of the material of Chapter 4 used does not exceed 20% of the weight of the final product and - the total combined weight of the sugar and of the material of Chapter 4 used does not exceed 60% of the weight of the final product
Chapter 18 Manufacture from materials of any heading, except that of the product, in which — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
Manufacture from materials of any heading, except that of the product in which: - the individual weight of sugar does not exceed 40% of the weight of the final product - and of the material of Chapter 4 used does not exceed 20% of the weight of the final product and - the total combined weight of the sugar and of the material of Chapter 4 used does not exceed 60% of the weight of the final product
Chapter 19 Manufacture from materials of any heading, except that of the product, in which: — the weight of the materials of Chapters 2, 3 and 16 used does not
Manufacture from materials of any heading, except that of the product, in which: — the weight of the materials of Chapters 2, 3 and 16 used does not
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exceed 20 % of the weight of the final product, and — the weight of the materials of headings 1006 and 1101 to 1108 used does not exceed 20 % of the weight of the final product, and — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
exceed 20 % of the weight of the final product, and — the weight of the materials of headings 1006 and 1101 to 1108 used does not exceed 20 % of the weight of the final product, and — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 20 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 20 % of the weight of final product
Chapter 21 Manufacture from materials of any heading, except that of the product, in which: — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
Manufacture from materials of any heading, except that of the product, in which: — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 20 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 20 % of the weight of final product
Chapter 22 Manufacture from materials of any heading, except that of the product and headings 2207 and 2208, in which: — all the materials of sub-headings 0806 10, 2009 61, 2009 69 used are wholly obtained, and — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
Manufacture from materials of any heading, except that of the product and headings 2207 and 2208, in which: — all the materials of sub-headings 0806 10, 2009 61, 2009 69 used are wholly obtained, and — the individual weight of sugar ( 1 ) and of the materials of Chapter 4 used does not exceed 20% of the weight of the final product, and — the total combined weight of sugar ( 1 ) and the materials of Chapter 4 used does not exceed 20 % of the weight of final product
Chapter 23 – 2309.30 (Calf Milk Replacer)
Manufacture from materials of any heading, except that of the product, in which: — all the materials of Chapters 2 and 3 used are wholly obtained, and — the weight of materials of Chapter 10 and 11 and headings 2302 and 2303 used does not exceed 20 % of the weight of the final product, and — the individual weight of sugar ( 1 ) ) and of the materials of Chapter 4 used does not exceed 40 % of the weight of the final product, and — the total combined weight of sugar and the materials of Chapter 4 used does not exceed 60 % of the weight of final product
Manufacture from materials of any heading, except that of the product, in which: — all the materials of Chapters 2 and 3 used are wholly obtained, and — the weight of materials of Chapter 10 and 11 and headings 2302 and 2303 used does not exceed 20 % of the weight of the final product, and — the individual weight of sugar ( 1 ) ) and of the materials of Chapter 4 used does not exceed 20 % of the weight of the final product, and — the total combined weight of sugar and the materials of Chapter 4 used does not exceed 20 % of the weight of final product
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Chapter 35 Manufacture from materials of any heading, except that of the product, in which the value of all the materials used does not exceed 50 % of the ex-works price of the product
3501 – Wholly Obtained 3502 – Wholly Obtained 3504 – Wholly Obtained
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Appendix: General Definitions and background information
There are two kinds of origin, non-preferential and preferential: - Non-preferential origin confers an "economic" nationality on goods. It is used for
determining the origin of products subject to all kinds of commercial policy measures or tariff quotas. Other provisions, such as those related to public tenders or origin marking, are also linked with the non-preferential origin of the products. The legal basis for the non-preferential rules of origin is Art. 22 to 26 of Council Regulation No. 2913/92 and Art. 35-65 and Annexes 9 to 11 of Commission Regulation No 2454/93.
- Preferential origin confers certain benefits on goods namely entry at a reduced or zero rate of duty, for goods traded between particular countries which have agreed such an arrangement or where one side has granted it autonomously. While the provisions of the individual arrangements (each individual arrangement has its own legal base) may vary in certain details, most preferential origin arrangements have a number of common provisions. One therefore needs to look both at the common provisions and at the specific provisions of each individual arrangement.
Wholly obtained or last substantial transformation
There are two basic concepts to determine the origin of goods namely “wholly obtained” products, as defined in art. 23 of reg. 2913/92 and products having undergone a "last substantial transformation" as defined in art. 24 of reg. 2913/92. If only one country is involved in the production the "wholly obtained" concept will be applied i.e. if plant products are harvested and animals are born and raised completely within one partner country. If two or more countries are involved, the concept of "last, substantial transformation" determines the origin of the goods.
Common provisions of originating status: Products have originating status if they are either wholly obtained or sufficiently worked or processed. This applies to all preferential origin arrangements. Non-originating materials or components must be sufficiently worked in order to obtain origin. Sufficiently worked means sufficiently worked according to the specifications of the list rules. This is a list of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status. There are several types of rules but the most common are:
- that only wholly obtained materials can be used - that non-originating materials from certain positions can be used in or are excluded
from the working or processing - that a specific working or processing operation must be carried out - that a certain percentage of value is added or cannot be exceeded in the production
process - a combination of different rules - that a choice between different rules is given
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Annex 4: EDA Issue Paper
“SPS Chapter”
If there is no UK membership of the Customs Union, it is important that a FTA includes an extensive chapter on SPS (sanitary and phytosanitary measures). It must cover a mutual recognition agreement accompanied by a mechanism to secure its smooth operation. In the agreement we propose, the parties should recognize each other’s autonomy and make room for small differences instead of requiring full alignment. But within the recognition agreement divergences must not undermine a level-playing field. Therefore, a joint management committee would be established to oversee the agreement including possible legislation adaptations.
An example of a way forward in a FTA framework
A joint management committee would be established to oversee the agreement. A more recent example
of this can be found in the EU Canada FTA: a “Joint Management Committee for Sanitary and
Phytosanitary Measures”. Its purpose includes monitoring the implementation of the SPS chapter,
providing direction in resolving issues; preparing and maintaining a document that details the state of
discussions between the Parties on their work on recognition of the equivalence of specific SPS
measures etc.
Historically, this is also the case for dairy trade between New Zealand and the EU which is governed
by an extensive SPS agreement1 which runs smoothly. The agreement facilitates trade by establishing
a mechanism for recognition of equivalence of sanitary measures and by improving cooperation and
communication. More concretely it specifies that equivalence shall be applied in relation to legislation,
inspection and control systems etc. (Article 7). To maintain confidence, each party has the right to carry
out audits and verification procedures which may include; assessment of authorities control programs,
on the spot checks and the right to carry out frontier checks on consignments on importation (Article
10). The parties shall also exchange information which is relevant to the implementation of the
agreement (Article 15) which also includes information on changes in sanitary measures.
Both parties the UK and the EU should also aim to conclude a veterinary agreement by establishing a
mechanism for the recognition of equivalence of sanitary measures operating in the two regions. It
would allow greater efficiency for inspections and auditing. It would include the application of the
principle of regionalisation for animal diseases.
It is crucial to ensure that the movement of dairy products runs as smoothly as possible with no barriers to trade. This should be easy to achieve since the set-up in the UK and the EU today share the same legislation. Therefore, no extensive analysis, control and approval procedure should be necessary to accept each other’s systems today. This should work for a transition period and ease the way forward. It is important that a long transition period is secured.
1 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:1997:057:FULL&from=EN
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Annex 5: EDA Issue Paper
“TBT Chapter”
It is crucial to ensure that the movement of dairy products runs as smoothly as possible with no barriers
to trade. If there is no Customs Union agreed between the parties, then the UK and the EU should
negotiate an agreement which secures smooth customs facilitation.
A new customs border and complicated transit procedures would impact importers and exporters in the
EU and the UK. Burdensome custom procures with checks as well as administrative delays could cause
further economic costs.
As mentioned in annex 1 (Hard Brexit Scenario), the adaptation of each product for the ‘other’ market
(EU to UK and UK to EU) would be burdensome. For instance, the definition of added vitamins and
minerals, possible claims, allowed additives and contaminants, or the composition of infant/ sports foods
could be different. Each product crossing the border would need to be adapted to national requirements,
or if an equivalent agreement existed, it would have to be checked by the import authorities and possibly
placed into quarantine, etc. For claims and other assessment, an agency would be needed and the
dossiers would be doubled for EU and British markets.
Given that the EU and UK today operate under the same legislation, this should continue to be
operational during a transition period where the UK could retain current EU regulations. All businesses
and authorities have already adapted to various EU requirements as all Member States were involved
in the process of elaborating and deciding on EU regulation at all levels and in all procedural steps. It
is important for the future of the dairy industry that this would be long transition period.
In the longer run the UK will potentially set up own systems. Changes would inevitably have a cost, on
the budget and human resources for businesses which - in the short run - will lose money to adjust their
business models to the new regulations, whether it is at the production or distribution level.
In order to reduce potential costs for EU27 and UK companies, the following principles should be
continued:
- Simplified procedures must be found within the Union Customs code including preclearance
procedures.
- Recognition of AEO (Authorised Economic Operator), recognising necessary standards and
supply chains which can result in reduced customs inspection etc.
- The UK must remain member of the EU transit system to facilitate trade.
A Joint Customs Cooperation Committee would ensure the proper functioning of this Chapter.
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Annex 6: EDA Issue Paper
“Geographical Indications”
The European dairy is the guardian of a unique culinary heritage and a cultural treasure: next to the legal protection of dairy terms, like ‘milk’, ‘cheese’ or ‘whey’ more than 300 designations of cheeses and other dairy products are protected as Geographical Indications through the EU quality policy and the Geographical Indications (GIs) protection scheme.1 The aim of the EU quality policy is to protect the consumers around the globe and as such GI products must comply with the strict requirements established by the product specifications to ensure their quality. These obligations encompass for instance the raw material and its origin, production methods or ripening times & conditions. Seventeen UK cheese GIs (out of a EU total of 258 registered cheese GIs) and one UK cream GI are registered in the Database Of Origin & Registration2 (DOOR). Furthermore, under the regulation protecting geographical indications of spirit drinks3, Irish cream (made with a minimum of 10% milk fat) should be produced in the geographical area of the island of Ireland (including Northern Ireland). DairyUK and EDA have agreed that GI protection should be maintained. Geographical indications are an integrated system within the EU and the UK and must be continued post-Brexit.
1 Regulation (EU) No. 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs 2 http://ec.europa.eu/agriculture/quality/door/list.html 3 Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89