Europe: Market access and barriers to trade

The EU acts as a single market, with prohibitively high tariff barriers to non-members wishing to export to the region (Table 1). The only exceptions are where Free Trade Agreements (FTAs) have been negotiated or where Tariff Rate Quotas exist for countries to export to the EU. For the UK, exports to the EU are tariff free under the EU/UK FTA.

Within the EU self-sufficiency ratios are high for products that can be produced in the region.

Table 1. EU tariff rates

Source: European Commission

Non-tariff barriers on trade with EU

Although the UK has a Free Trade Agreement with the EU that enables tariff-free access for agricultural exports, it is still subject to a range of non-tariff barriers (NTMs) since its departure from the single market. NTMs add cost and time for exporters, and are often referred to as ‘trade friction’, (a force that hinders or slows free movement of goods.

NTMs vary according to the product traded but include Export Health Certificates (EHCs), labelling requirements including stated country of origin, and sanitary and phyto-sanitary requirements, as well as physical checks at the border to ensure compliance. AHDB analysis estimates these NTMs add, on average, between 5– 8% for livestock products and between 2–5% for plant-based exports. The cost per load varies depending on specific requirements and whether the load is subject to a physical check, but data shows many smaller traders have been deterred from exporting to the EU since Brexit due to the disproportionate cost and the inability to spread that cost over a large load.

An example of this is the so-called groupage effect. Previously, individual pallets from small exporters could be grouped into one load for transportation to reduce costs. However, the risk of one pallet being non-compliant ‒ which could result in the whole truckload being rejected ‒ means this is too high-risk for small exporters.

There are no additional checks at present for goods entering the UK, but it is thought the Border Operating Model will be implemented later in 2023.


Food security – from EU-27 Outlook 2022

High EU self-sufficiency rates across agricultural products derive from favourable natural conditions, diversity of territories and climate, and the competitive EU position relative to other global suppliers.This also reflects the cumulative results of the Common Agricultural Policy over the years, while food security is a core goal of the EU Treaty.

In the next 10 years, the EU is expected to remain self-sufficient in wheat and barley, while for maize, favourable world prices are likely to favour imports over domestic production growth.

Historically, the EU has low self-sufficiency rates in oilseeds. However, the expected increase in feed demand for GM-free meals, relatively higher profitability compared to cereals and reinforced crop rotation are likely to push the production of oilseeds up, resulting in a higher EU self-sufficiency, especially in soya beans.

EU self-sufficiency rates are above 100% overall for animal products and these rates are likely to persist, despite some reduction in EU because consumption is also expected to decline (especially in meats) and export growth could also fall.

The EU is due to reinforce its positive net trade position (+21% increase in net trade compared to 2022), with exports of high-value food products, beverages, and dairy more than compensating for imports of commodities such as vegetable oils and animal feed.

At the same time, EU exports will remain well-diversified while diversification of EU imports may be reduced, but without significant exposure to a large concentration of suppliers.

Average food expenditure at household level is expected to decrease by 2 percentage points in 2030 compared to 2020 (20%), which is a record level.

Over the medium term, greater convergence is likely between EU-13 and EU-14 countries.

Nevertheless, these projections have to be considered with special caution, against the backdrop of uncertainties about broader socio-economic impacts of crises (such as changes in livelihoods, growing inequalities).

Source: EU-27 Outlook 2022

Trade in agricultural products

In 2021, the value of total trade of agricultural goods between the EU and the rest of the world was €347b. Between 2002 and 2021, EU trade in agricultural products more than doubled, an average annual growth of 4.8%. In this period, exports (5.4%) grew faster than imports (4.2%).

The UK is important for trade with the EU, being its largest export destination of agricultural products (€42b, 21%), and the second largest origin of EU imports, just behind Brazil (both around €13b, 9%). In terms of animal products, the UK was the second largest importer into the EU, just behind Norway, mainly due to the imports of fish products. This demonstrates the importance of the UK/EU trade relationships and how vital it will be to maintain and utilise growth in this region in the future.

The rest of Europe

Looking further afield than the 27 EU-27 member states there are other European countries that may offer opportunities. The European Free Trade Association (EFTA) consists of Iceland, Liechtenstein, Norway and Switzerland, and is a regional trade organisation that enjoys a free trade area with EU member states. Since the UK left the EU the UK government has worked on establishing rollover Free Trade Agreements to ensure continuation of trade during the transition, including with the EFTA countries.

In 2022, the biggest UK exports to these four countries are cheese and lamb, with £6.5m worth of cheese and nearly £4m worth of sheep meat exported in 2021. The OECD does not forecast per capita consumption to increase significantly in these regions for beef, pork, sheep meat or dairy products. However, the OECD does forecasts that imports of cheese could increase by a couple of thousand tonnes so there could be opportunities, especially for higher-value types of cheese.