My Lords, I declare my interests as stated in the register. Tariff-rate quotas have been set for mostly agricultural products, to allow some countries preferential access to the EU single market below the tariff rate set for those products. The UK does not have its own national tariffs but merely shares in the amounts set for all member states across the EU. This is most important to the agricultural sector and industry, as it sets out the quantity that comes into the EU at preferred competitive rates, bearing in mind that products still have to be compliant with the relevant EU standards.
On exit, these TRQs at EU level will need to be split between the remaining states and the UK. The proposal agreed between the EU and UK is that the product quota should be split according to the relevant usage or consumption of the product in the UK and EU. The difficulty arises on the specific quantities, as there is a lack of data to inform the division. Although there is detailed information on the point of arrival of products into the EU, there is not the same detail regarding where the product may be consumed. The EU and UK, in bilateral discussions, have agreed to adjust the schedules without triggering renegotiations under Article XXVIII of GATT. This was submitted in October 2017. However, it was almost immediately challenged by the large exporting countries, such as the US, Brazil, Australia and New Zealand.
I cannot overstress how critical this issue is to British agriculture and the nation’s consumers. It is revealing that so many glib answers are often proposed in the current impasse over Brexit. From a lack of information and knowledge, poor judgments are made, leading to a lack of appreciation of the consequences. I am sure I do not need to explain to the Minister the delicate balances in the market, where price volatility results from small changes in supply, quite irrespective of the huge discrepancies in tariffs under preferential treatment and other third countries that have allowed managed change to take place.
To give one example, Britain’s sheep exports, with large implications for the Welsh economy, comprise more than one-third of production, with almost all of it destined for Europe. This trade is virtually one-way, with minimal imports from the EU. Without agreement, and a smooth transition, tariffs to the EU would render this trade immediately uneconomic. The seriousness of the issue was underlined by a joint letter from the British Retail Consortium, signed by the chief executives of all the major supermarkets—Sainsbury’s, Asda, M&S and Waitrose, among others—only two days ago. The BRC stated that it wanted to maintain the same tariff-rate quotas. The wording of the amendment signifies that it is a probing amendment to ask the Government to provide some certainty in their answers to the challenges, and their approach to the future.
Amendment 54, in the name of the noble Lord, Lord Purvis, calls for a report to Parliament, and I look forward to the noble Lord’s remarks. The concern is that access to the home market—and, hence, the vibrancy and well-being of agriculture and the rural economy—will be sacrificed as a pawn in negotiations in rolling over trade deals to be ratified by third countries in the future, especially in relation to the interests of other industries. The Committee has already debated the fear that standards would also be under jeopardy. It is imperative that the UK Government continue to maintain the present TRQs. I beg to move.