Trading arrangements with the EU

This note sets out the advantages for Scotland of a comprehensive veterinary and SPS agreement, the background, what will be required and how we can work together to achieve it. 

The election of a new UK government provides an opportunity to boost Scotland’s food and drink industry. For many years we have called for a comprehensive ‘Veterinary and SPS Agreement’ which would substantially reduce barriers to trade with the European Union. 

Prior to the election, the Labour Party made a manifesto commitment to ‘negotiate a veterinary agreement to prevent unnecessary border checks and help tackle the cost of food’.  We share this ambition to bring about a new trading relationship with the EU. 

We need the best possible conditions for business growth, job creation and biosecurity. We believe the best future for the economy is to be an independent member state in the EU. However, we will do whatever we can in the current circumstances to further Scotland’s interests. 

The impact of Brexit on food and drink 

Evidence indicates that the current rules imposed by Brexit are responsible for nearly one third of food price inflation and that UK households have paid £7 billion to cover the cost of post-Brexit trade barriers on food imports from the EU. Read more: Brexit and Consumer Food prices 2023. 

Many Scottish food industries are also suffering from lower volume of exports to the EU – including a 59% fall in fruit and vegetable exports and 29% fall in meat exports in the year ending March 2024, compared to the equivalent period in 2020. Read more: Inflation Adjusted HMRC Regional Trade Statistics for Scotland Q1 2024. 

Benefits of a comprehensive veterinary and SPS agreement 

A comprehensive agreement would benefit the Scottish economy, producers and consumers, especially in rural areas. It would also benefit our partners in the UK and EU. 

Scottish agrifood exports comprise a larger share of our GDP than in the rest of the UK, and we account for 30% of total UK food and drink exports. Around 96% of our Scottish food and drink manufacturing sector businesses are SMEs.  

Industry strongly supports an agreement because they see the value in making trade with the EU easier and more cost-effective for businesses, and in delivering for their consumers. This will help businesses take advantage of the size of the EU market while delivering choice for Scottish consumers and sustaining our agrifood sector. Read more: Food and Drink Federation Scottish facts and stats. 

Agri-food exports overall are worth over £28 billion to the UK economy.  In the two years after the post-Brexit trading rules were put in place, research shows UK exports to the EU fell 5% from 2019 levels, during a period where the sector has otherwise grown.

One study estimates that an agreement could increase agri-food exports from the UK to the EU by at least 22.5%.

Read more: UK trade - Office for National Statistics and Veterinary deal would increase UK agrifood exports to EU by more than a fifth | Aston University 

An agreement could also help the movement of pets accompanied by their owners when travelling between the UK and the EU, by eliminating the need for costly veterinary certificates.

The current barriers to trade and red tape range from large-scale physical infrastructure to technical provisions - all of which directly impact our trade with the EU. 

An agreement could have significant benefits for our key export products such as whisky and salmon. The EU is our largest single market and while the value of agri-food exports to the EU is now higher than before the pandemic, the growth in the volume of exports has been weak across many products.

Many smaller producers in the rural economy have found Brexit customs procedures and costs extremely challenging. Such an agreement could strengthen Scotland's economy, particularly in rural and island communities.   

An agreement could help the process of rebuilding relationships with our European partners.

It could: 

• reduce or remove many of the new barriers to trade in goods since Brexit (e.g. reducing the need for form filling, inspections and checks at the border) 

• improve the volume of agri-food trade, including streamlining trade in food and drink products, especially beneficial for perishable products that need to be moved quickly 

• restore access to EU markets for specific products that are currently barred, such as live bivalve molluscs (LBMs) and seed potatoes

• deliver high biosecurity standards and protections and ensuring quality products for consumers 

• help us work together to tackle disease outbreaks and other risks, through facilitating access to counterparts such as agencies and alert systems about plant and animal health outbreaks and potential product concerns 

• reduce checks needed on goods moving between Northern Ireland (NI) and Great Britain (GB)  

• help us join up with the European Food Safety Authority (EFSA), to share information and ensure decisions include Scottish evidence and data, including sharing best practice and observer status where applicable 

What the agreement should include  

We want a comprehensive agreement with a wide scope. These benefits will only be fully effective if the agreement includes: 

• animals, plants and their products 

• food and drink products 

• veterinary medicines 

• agricultural goods and products  

• animals travelling with their owners i.e. pets and competition horses 

It will be necessary to ensure that the rules that govern the products to be traded are aligned between the EU and Scotland/UK.

Many of these rules are in areas of devolved competence and we already have a commitment as the Scottish Government to align with the EU.   

We fully support aligning with EU rules where this can bring benefits such as maintaining high biosecurity standards, protecting consumers and businesses, and supporting our economy.

There are dual benefits for trade and for environmental and consumer protection in aligning with EU standards. 

Next steps  

Given the importance of the food and drink sectors to Scotland's economy, we want to move quickly to open collaborative discussions with our partners on a comprehensive veterinary and SPS agreement.

We have a large share of UK food and drink exports and many of these sectors are areas devolved to Scotland. 

We will work with the UK Government and other devolved governments in this important area as soon as possible - to achieve the shared goal of removing unnecessary barriers to trade with the EU, and reducing costs for businesses and consumers across the UK.