UK-India trade review calls for flexibility on food standards and chemical rules

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Unearthed | 12 July 2018

UK-India trade review calls for flexibility on food standards and chemical rules

by Zach Boren

The UK should be prepared to relax EU rules on food standards and chemical safety as part of a new trading relationship with India, according to an unreleased report (pdf - 20 MB) by the British and Indian governments.

The official joint trade review – obtained by Unearthed despite the UK government’s refusal to release it – spotlights a range of non-tariff barriers to trade identified by Indian businesses, including limits on fungicides in basmati rice, the enforcement of food hygiene standards for milk and dairy products such as paneer and the use of hormone-disrupting chemicals across a range of non-food products.

The list – drafted by the Indian ministry of commerce – stops short of demanding the rules be removed after Brexit, instead suggesting flexibility in how and when they are applied to meet the needs of exporters.

The review, which also focused on life sciences and information technology, was described by the British government as a key text for the new UK-India trade partnership announced in April at the Commonwealth summit.

Speaking at the event, international trade secretary Liam Fox claimed that “removing barriers to trade is a key way the UK can capitalise on the predicted growth in world markets”. He repeated the claim when speaking in India last month.

Despite numerous public references to the review by Fox, the British government refused to provide the document following an Unearthed freedom of information request.

The Indian government, however, complied with a parallel right to information request.

A spokesperson for British department of international trade said: “As we leave the EU, we will forge new and ambitious trade links around the world, while also maintaining our high standards on animal welfare and food safety.

“The joint trade review’s findings underline the continued strength of the bilateral relationship between the UK and India, and we are committed to driving forward this mutually beneficial trading arrangement. This includes in the food and drink sector where we are working together on a sector-based roadmap to reduce trade barriers.”

The Indian government failed to respond to request for comment

White paper

The UK would be unable to address India’s key complaints in the trade review under the terms of its proposed Brexit white paper, experts have told Unearthed.

“Theresa May’s Chequers’ proposal would prevent the UK from making concessions to India in all areas related to plant and animal health, as it would continue to be bound to the application of the EU’s regime,” according to Sam Lowe, trade analyst for the Centre for European Reform.

“The UK would not be able to take a different approach on REACH [Europe’s chemical regulation regime] or on endocrine disrupting chemicals. It would still be required to perform physical inspections on 50% of imported Indian shrimp.”

The report

The first part of the 52-page review is effectively a statistics-driven overview of the countries’ current and potential trading relationship, but the second section lists ‘issues faced’ by British and Indian businesses in their ‘sectors of interest.’

The UK is not allowed to begin negotiating trade agreements with countries until it has formally left the EU in 2019, and the language of the report is not explicit about a post-Brexit agreement nor about the EU laws the UK could cease to follow.

The report’s conclusion notes “the UK’s existing framework as an EU member state means that many issues remains within EU competence” but it devotes pages upon pages to complaints concerning trade barriers that stem from European law.

The final recommendations are far from concrete, and instead amount to repeated suggestions to increased dialogue on how the issues can be addressed.

Out of REACH

According to the chapter on non-tariff trade barriers written by Indian policymakers, the main issues concern the EU’s limits on the trace amounts of pesticides in food products, its restrictions on hormone-disrupting chemicals, and the burden of its complex REACH chemical regulations.

The EU’s limits on the amount of chemical residue found in food products is clearly a source of aggravation to Indian businesses, who describe complications complying with rules on a range of exports:

  • Trace amounts of of fungicide in basmati rice
  • Growth retarding chemicals in grapes
  • Aflatoxins in chillies and spices
  • Antibiotics in fish products
  • Food hygiene standards at processing plants involved in milk products such as paneer

Another key complaint relates to the EU’s attempts to regulate hormone-altering chemicals known as endocrine disruptors in non-food products such as toys, with 34 of the 69 products impacted said to have a direct effect on India.

And then there’s REACH, the EU’s vast and complex regulatory regime for chemicals, that India has frequently challenged at the World Trade Organisation.

The report states that: “Indian exporters experience various difficulties in complying with REACH” and then goes on to list its long-held bugbears.

Michael Warhurst, executive director at the ChemTrust, told Unearthed: “The difficulty that Indian exporters face in complying with EU rules on imported products should not be grounds for the UK to reduce standards of protection of human health and the environment.”

The report cites an assortment of other complaints with a range of EU rules, such as lead limits in jewellery.

Political turmoil

The release of the report comes at a pivotal moment in the UK’s separation from the European Union, as the British government officialises the type of Brexit it will pursue in its long-awaited white paper.

The current proposal, which would see alignment with EU standards on goods and agri-food but not services, has triggered an uproar from the pro-Brexit press and key figures, leading to the resignation of David Davis and Boris Johnson and several less-known ministers.

But other key ministers – including Fox – remain in place, with the UK still nominally committed to a policy of signing trade deals with countries around the world.

The report will lead to an increased focus on how much flexibility the UK will now have to meet demands from India and other nations regarding chemical and food import standards.

Read the report (pdf - 20 MB)

source: Unearthed