EU-UK TCA - what does it mean for Nitrate Vulnerable Zones?

This brief article considers environmental regulations and, taking Nitrate Vulnerable Zones (NVZs) as an example, whether UK authorities are likely to deregulate and relax requirements following the end of the transition period and the provisional coming into force of the EU-UK Trade and Cooperation Agreement (TCA) on 1 January 2021.

Will NVZ rules be relaxed as a result of Brexit?

The UK authorities could, technically, amend NVZ rules as they apply in GB following the end of the transition period. The current EU rules (contained in the Nitrates Directive) were already on the UK statute book via the Nitrate Pollution Prevention Regulations 2015 in England, with corresponding regulations in Wales, Scotland and Northern Ireland. Following the end of the transition period, these regulations have simply been amended to reflect the fact we are no longer part of the EU, but otherwise impose the same rules on farmers.

However, in practice, while there may be changes to some administrative elements of the rules (e.g. record-keeping/reporting), there are unlikely to be changes to the basic requirements dealing with how nitrates from agriculture are managed in the UK. Authorities will continue to publish and review their nitrate Action Programmes for NVZs, not because they are required to by EU law but because the government is committed to reduction nitrate pollution in water from agriculture and the Action Programme is a tried and tested way of achieving that.

The UK will no longer have to report every four years to the EU on its progress. However, there are no signs that the Government is targeting water pollution for deregulation. Far from it; the Government is proposing to develop specific legally-binding targets to further reduce water pollution from agriculture under the Environment bill.

In addition, under the EU-UK Trade and Cooperation Agreement now in force, the EU and the UK have agreed not to “weaken or reduce, in a manner affecting trade or investment between the Parties” their respective environmental levels of protection below the levels in place at the end of the transition period.

Level playing field and rebalancing measures

If we imagine a situation where the Government did relax NVZ or other environmental rules in such a way that farmers’ compliance costs were reduced, enabling them to undercut EU farmers, then there is a remedy provided for in the TCA. At its extreme, the EU would, in theory, be able to impose “rebalancing measures”. These would have to be proportionate to the damage suffered but could include retaliatory tariffs on exports. The UK would, in turn, be able to refer the matter to arbitration and the EU would be required to show that the UK’s deregulatory measures materially impacted on trade and investment flows in a way which disadvantaged the EU.

In summary, it is difficult to envisage the UK Government relaxing its nitrate pollution regime for farming. If it did, any deregulation is unlikely to make enough of a difference to our producers’ competitiveness as to directly impact trade with the EU and lead to the imposition of retaliatory tariffs.

For further information, please contact Julie Robinson or any member of the Roythornes Agriculture Team.