Brexit & Agricultural Machinery: What Trade Deal Is Needed? What Are the Risks for Farmers and the Industry?
CEMA calls for a comprehensive trade agreement, continued regulatory cooperation & a balanced UK National Agricultural Policy (NAP).
21 November 2017
Executive Summary
CEMA is greatly concerned by the Brexit and its potentially adverse economic consequences on the agricultural machinery industry and the farming community. Brexit risks to exert a negative impact on:
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the UK’s agricultural machinery market;
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incomes of farmers and agricultural contractors in the UK and the EU-27 (and thus on the principal customers of the agricultural machinery industry).
To limit the above-mentioned challenges and risks:
I. CEMA calls for the most comprehensive trade agreement possible to be reached between the UK and the EU
Technically speaking, following the Brexit, the UK will become a ‘third country’ for the EU, creating numerous uncertainties. As such, the EU and the UK should aim to reach the most comprehensive trade agreement possible and ensure that:
- tariffs on EU-UK trade be avoided at all costs,
- customs clearance procedures remain simple,
- rules of Origin be based on existing provisions with EFTA states.
One issue of major concern is to maintain Technical/Regulatory Convergence between the UK and the EU after Brexit. In the EU, 3 major regulations represent between 85-90% of all regulatory costs incurred by the farm machinery industry – with a proven negative impact on its productivity. For the industry, it is therefore of outmost importance that no extra costs be added to these EU regulations by the Brexit and that the future relationship ensures a level playing field for the UK and EU industry, particularly with regards to these 3 major regulations, which are:
1. Emissions Regulation (EU) 2016/1628
CEMA urges the UK to keep its future emission legislation as much aligned as possible with the EU and US legislations.
2. Regulation (EU) 167/2013 on the approval and market surveillance of agricultural and forestry vehicles
In CEMA’s view, it will be important that:
- Legal uncertainties with regards to the applicability of recently amended Delegated Acts be clarified.
- VCA remains part of the European network of type-approving bodies and that tractors type-approved in EU-27 or the UK could access both markets with a presumption of conformity.
- The British Standards Institute (BSI) to continue its membership in CEN.
- BSI to remain a member of CENELEC and ETSI to define standards related to data access.
3. Machinery Directive 2006/42/EC
No major impact by Brexit is anticipated in the short term.
Moreover, it will be important for the UK and the EU to find agreements on:
- a proper arrangement on the mobility of workers; and
- a transition period to avoid potential trade flow disruptions under WTO tariffs.
In addition:
II. CEMA calls for a balanced future UK National Agricultural Policy (NAP)
Direct payments by the EU’s Common Agricultural Policy (CAP) make up 62% of farm business income in the UK. After Brexit, it will therefore be important that the UK establishes a new National Agricultural Policy (NAP) along the lines of the CAP. In doing so, it will be important to ensure:
2.1 A well-managed transition from the CAP to the NAP
Before the basic payments will end, the UK Government has a unique chance to give farmers an early notice of what its intentions are and what the future NAP will look like. This early notice is essential for farmers to make appropriate investments in their holdings and in terms of machinery purchases.
2.2 A dedicated focus on Precision Agriculture
To boost competitiveness and sustainability in farming, Precision Agriculture technologies should be eligible for future NAP support.
