The impact of Free Trade Agreements on British diets
Dr Pepita Barlow, Assistant Professor, Department of Health Policy, LSE
Whether or not the UK will be able to secure its food supplies after Brexit has been the subject of considerable attention and debate ever since the June 2016 referendum. Experts have cautioned that several scenarios, including a ‘no-deal’ Brexit, could affect the quantity of food the UK has access to, its safety, and overall food prices.(1) For example, research commissioned by the National Farmers Union (NFU) indicates that reverting to WTO rules may result in a price increase of up to 8% in some sectors.(2) Signing Free Trade Agreements (FTAs) with the EU and other countries has been identified as one key strategy to help keep food prices low and ensure Britons maintain access to enough food following the end of the transition period on 31 December 2020.(1)
Yet, ensuring people can eat healthily and are ‘food secure’ requires much more than simply facilitating food trade and access to an abundance of food, at low prices. Food security exists when people have “access at all times to sufficient, safe, sustainable and nutritious food, at affordable prices”.(3) Looking at the UK as a whole, there appears to be more than enough calories in the food system to meet every individual’s daily energy needs.(4) However, this only paints a partial picture of dietary quality food security in the UK. The nutritional quality of many peoples’ diets has declined in recent years, and is especially poor among disadvantaged groups living on low incomes.(5–7) Many peoples’ diets are now rich in added sugars and fats, consumed as sugary drinks and ultra-processed, pre-packaged ‘junk foods’ that have large numbers of calories and few nutritional benefits.(8) At the same time, however, many in the UK are also ‘food insecure’ – despite an abundance of calories at the national-level – as they struggle to consistently afford enough food to eat and, at times, family members go hungry.(10)
What these points illustrate is that any attempt to safeguard and promote healthy diets and food security via FTAs must consider so much more than simply the impact on food trade, food supplies, and prices. The nutritional quality of the specific foods the UK has access to are also important. Furthermore, food security exists when people can afford that food and any impact of FTAs on incomes and job security can influence whether trade deals ultimately enhance food security.
Over the past decade, our research has demonstrated that FTAs can indeed impact on the nutritional quality of the foods populations have access to, as well as peoples’ incomes and hence their ability to afford enough food to eat, on a consistent basis.(11–15) To date, however, UK discussions about FTAs and food security have touched only on a narrower range of issues, including food safety. Our research has identified a much wider range of implications of FTAs for the UK to consider if its trade treaties are to be successful in sustaining the country’s health and avoiding any adverse impacts on our diets, nutrition, and food security. The list of issues is potentially extensive, and in the interest of brevity I focus on two.
First, there are both winners and losers from FTAs.(18) Those working in industries that face increased competition as a result of trade often experience income stagnation, wage declines, and even job loss.(19) This can undermine their ability to afford food and hence food security too.(11) The effects are likely to be especially acute if policy-makers do not implement effective policies that mitigate these risks, such as effective job-search support and re-training systems.(18)
Second, FTAs can impact on the nutritional quality of peoples’ diets through changes to the price, convenience, and advertising of unhealthy foods, and the ability of governments to regulate unhealthy products.(20) FTAs reduce the cost of cross-border trade and investment. Unhealthy food and drink are typically treated like any other commodity in FTAs and so trade and investment barriers would be reduced for a range of unhealthy products too. FTAs can also lower the cost of cross-border trade and investment in goods and services that are used to sell and promote unhealthy food and drink including machinery, such as vending machines, and advertising services.
Each of these changes, in turn, may affect the price and convenience of unhealthy food and drink, and encourage increased advertising and promotion of them as well. For example, FTAs can reduce tariffs – import taxes – on ultra-processed foods rich in added salt, sugar and fat, or on these ingredients, making it cheaper for FTA partners to sell or export unhealthy products, or use unhealthy ingredients in food processing. A number of studies have identified these food system changes following the ratification of FTAs, especially with the US, and corresponding rises in the apparent consumption of excess calories, sugar-sweetened drinks, sugars, and ultra-processed foods.(12,13,21) For example, our analysis of the impact of the North American Free Trade Agreement showed that removing a 5% tax on imports of high-fructose corn syrup from the US to Canada led to a three-fold increase in its use in Canadian food production.(13) A recent analysis also showed that after countries joined a US FTA, sales increased for ultra-processed products, processed culinary ingredients and baby food.(21)
What is also important, albeit more complicated, are changes to ‘non-tariff’ barriers to trade, such as regulations affecting food and drink products. This includes, for example, regulations requiring foreign food exporters to attach nutrition labels on foods in order to conform to UK regulatory standards. Such regulations can be removed or harmonized to a lower standard in FTA negotiations, leading to changes in labelling policies. This could mean those labels are less effective in communicating the nutritional contents of a food and hence less effective in encouraging healthier food purchases. For example, during re-negotiations of the North American Free Trade Agreement in 2018, President Trump sought to limit the ability of the pact’s three members — including the United States — to introduce mandatory front-of-pack nutrition labelling.(22)
FTAs can also include clauses about regulatory transparency and dispute resolution. These clauses can have consequences for the capacity of governments to regulate in ways that promote healthier diets. For example, FTAs typically require members to ensure they do not introduce ‘unnecessary’ trade costs when introducing new public health policies, including regulations designed to limit the promotion of unhealthy food and drink or encourage healthier food purchases.(23) This creates scope for trade partners to argue that food and drink regulations designed to promote healthy diets breach rules in FTAs. This has occurred frequently at WTO, where Canada, the US, and Australia have argued that regulations on the sugar content of packaged foods and labelling of snack foods breached WTO rules, leading those countries proposing the policies to abandon their proposals, delay implementation, or water down the policies.(15)
In addition, FTAs often include clauses requiring governments to allow stakeholders in other countries to participate in policymaking. These provisions mean that food industry representatives from other countries (in addition to the home country) would have the opportunity to participate in policy development.(25) Given that many international industry groups have often opposed regulations that could promote a healthier diet – by for example limiting food advertising or increasing food taxes – these clauses could limit the UK’s ability to introduce evidence-based policies that promote healthier diets.(26) This includes policies recommended by WHO to prevent child and adult obesity, diabetes, and related illnesses such as cardiovascular disease and some cancers.(27) Policies that may be limited via these clauses also include those that UK government has said it was considering as part of its current obesity policy initiatives, including changing food promotion and prices, advertising restrictions, extensions to food taxes designed to foster healthier diets, and mandatory labelling, among others.
Many FTAs also grant foreign investors protection from reducing the value and profitability of their investment.(23) This can be argued to have happened where a government policy – such as a nutrition policy – reduces the value of an investment by, for example, reducing sales of a product – such as a sugary drink or ultra-processed snack food.
As such, any policy designed to encourage healthier diets by limiting food promotion (via advertising restrictions) or increasing the prices of unhealthy goods (via levying taxes) could be argued to affect the profitability of an investment. Foreign food businesses could threaten to sue government, leading them to adopt a less effective measure or delay implementation, by making use investor-state dispute resolution processes that are established via FTAs.(25) Similar arguments have been raised regularly at WTO, indicating that instances of ‘regulatory chill’ in the context of FTAs may be widespread (although a lack of transparent and systematically coded data prevents us from knowing the full extent of this pressure).(15)
In sum, FTAs can impact on diets in many ways. The UK’s future FTAs will have widespread implications for the nutritional quality of UK diets and on peoples’ ability to afford them. Against a backdrop of poor nutritional quality and a long-standing need to improve peoples’ diets, FTAs risk making the situation worse by increasing exposure to cheap, heavily marketed unhealthy foods, and by limiting the government’s capacity to regulate to promote healthier diets. Furthermore, FTAs impact on peoples’ livelihoods, and those who lose out from trade can experience rises in food insecurity if their wages decline or stagnate, or if they lose their jobs; these issues are likely to be exacerbated if job-search and re-training support is inadequate.
Experiences elsewhere indicate that there is nevertheless scope to design FTAs that promote healthy and safe food. Canada, for example, refused to agree to the US government’s request to limit front-of-pack labelling as part of its NAFTA re-negotiations. An evidence base also exists for government to conduct a full impact assessment of FTAs on diets (and health more broadly). The government has an opportunity to identify areas that require risk mitigation, thanks to a large body of research assessing FTA impacts on health and diets, as well as forward-looking analyses of FTAs similar to those the UK is now looking to secure.(20,24,25,28)
As the UK government looks to rebuild its economy post-Brexit and in the aftermath of COVID-19, policy-makers and politicians may nevertheless be swayed by economic arguments calling for policies that promote trade in order to stimulate the economy. However, a failure to take the nutritional and health impacts of FTAs into account when negotiating new FTAs could also be costly, by leading to health harms (e.g. rising obesity, diabetes, and malnutrition) that strain the NHS now and in the future.(29,30) Put simply, the UK cannot afford to overlook the wider implications of FTAs on British diets.
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