MPs pick up on NPA concerns over post-COVID protectionism
30th Jul 2020 / By Alistair Driver
MPs have picked up on the NPA’s concerns over how term COVID-19 could result in a long-term shift towards protectionism in international trade.
Two parliamentary reports have been published this week, ahead of the parliamentary recess, on the impact of COVID-19 on international trade and the food chain.
The International Trade parliamentary Select Committee concluded that UK supply chains in critical sectors, pharmaceuticals, medical supplies and food, have largely held up during the pandemic, despite spikes in demand, disruption to production and freight, and export bans in some countries.
The report, which can be viewed here, welcomes efforts by UK Export Finance to support UK businesses trading overseas and the rolling out of ‘bounce-back’ schemes for key sectors. These include Wicks Manor, an Essex pig business that doubled pork export revenues during lockdown and was singled out as a success story by International Trade Secretary Liz Truss.
The report expresses concern about the lack of a coordinated plan of action as regards to trade from the international community early in the pandemic. It urges the UK Government to act to ensure that temporary disruptions do not become permanent barriers to trade.
It states that measures taken in response to the pandemic were applied by governments unilaterally, and with little advance discussion at the international level. The inquiry received evidence from the NPA that, in the long term, COVID-19 could result in a shift towards protectionism.
In our submission to the inquiry, which can be viewed here, the NPA wrote:
“The longer-term impacts of Covid-19 could lead to more countries engaging in more self-sufficient policies and turning away from multilateral trade.
“This could represent a significant risk to the UK pig sector, which has seen such a significant growth in exporting to developing economies which have been badly affected by the pandemic and other issues (such as African swine fever).
“It cannot be overstated how much time, energy and capital has been invested in opening up new export markets either for immediate benefit, or as potential future key markets. It can take very little for export partners to stop this level of trade co-operation; as mentioned above some export partners are very sensitive to negative briefings against their policies and this can stop trade very quickly.
“Others may well try and use the pandemic to argue for more protectionist measures, and the UK must stand ready, working together with other countries where possible, to take measures through the WTO or unilateral counter-measures as a deterrent to such protectionist policies.”
Food supply chain
The EFRA select committee report, which the NPA also fed into, was more critical, questioning why the Government appeared unprepared for the impact of hospitality business closures on food and drink suppliers, and the possibility of empty shelves in supermarkets – despite similar disruption having been seen in other countries at the start of the COVID-19 outbreak.
Although the report concludes that in many areas Defra’s response to food supply disruptions was largely commendable, it lays out a series of lessons the Government must learn, particularly in relation to the foodservice and food supply sectors.
- The report finds that cross-border movement of food kept the country well supplied, despite empty shelves in supermarkets. It warns that future crises that affect how much food comes into the country, such as a disorderly end to the transition period at the start of 2021 or climate change effects, will pose potentially greater challenges. The Committee calls on the Government to review resilience plans for the food sector, assessing the extent to which our dependence on multi-national, just-in-time supply chains affects resilience.
- The MPs found that the Government was too slow to provide guidance for key workers in the food supply sector, including in relation to the use of PPE and implementation of social distancing measures, a point that appeared to be shared by many within the meat supply chain. They commend the industry for rapidly developing guidance in the vacuum left by Government, and urge Government to ensure that in any future disruption, guidance can be issued more rapidly
- The report calls on the Government to closely monitor food and drink suppliers over the next 18 months and ensure previously thriving hospitality and foodservice businesses remain economically viable.
- The Committee calls on the Government to continue to fund the £5 million a year FareShare project to redistribute otherwise wasted food from farmgate to frontline community groups.
EFRA chair Neil Parish said: "Despite warnings from other countries, it seemed as though the Government was constantly playing catch-up in trying to support the food industry during this crisis.
“The Government’s actions to lock-down the country and close businesses were necessary, but they had huge impacts on the food supply chain. I unreservedly thank all the key workers for their essential role in keeping the nation fed during this time.
But he stressed that once the pandemic set in, Defra responded well.