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No-deal Brexit could have disastrous effects on the food industry

As the fourth round of negotiations between the EU and UK draw to a close, concerns have been raised about the lack of progress towards a trade deal.

Agricultural interest group COPA-COGECA has joined forces with trade bodies CELCAA and FoodDrinkEurope to release a joint statement warning of the effects that a no-deal Brexit could have on the UK-EU agri-food industry.

The statement expressed hope that the lack of progress made in the last three rounds would be repeated this time ahead of the end of the transition period on December 31, 2020.

The EU agri-food trade with the UK amounted to around €58 billion in 2019, and the statement stressed that the lack of an agreement, combined with the introduction of tariffs and the potential for regulatory divergence could severely disrupt integrated supply chains.

They further stipulate the necessity for a level playing field between the EU and the UK, which they say is crucial for guaranteeing fair competition between EU and UK suppliers.

In a press conference on June 5, 2020, EU chief Brexit negotiator Michel Barnier said that there has “been no significant progress” in talks between the EU and UK.

This includes coming to terms with a beneficial trade deal or in talks regarding fishing or obtaining the desired level playing field.

The EU is the UK’s largest trading partner, accounting for 45% of exports and 53% of imports.

The joint statement, released ahead of the conclusion of the fourth round of negotiations, said: “[We] are particularly concerned about the limited amount of time available in which to conclude and ratify a trade deal. We regret that the UK government is currently opposed to any extension of the post-Brexit transition period beyond 2020.

“The transition should be of sufficient length for businesses to plan and prepare for any FTA arrangements and to avoid a cliff-edge situation.

“We urge the consideration of alternative, temporary arrangements that could be implemented from the start of 2021 should it not prove possible to conclude an FTA this year. Such temporary arrangements, which would need to preserve tariff and quota-free trade, would afford additional time for negotiators while minimising disruption for operators already coping with significant impacts of Covid-19.”

The statement from the agri-food industry bodies laid out several criteria essential for the future relationship of the EU and UK:

The consortium warns that one of the potential repercussions of not securing a proper trade deal includes a significant loss in export volume, loss in revenue and the potential for consequential job losses.

They also state the impact on SMEs, farmers and agri-cooperatives would be particularly detrimental.

The statement added: “In view of the stocktaking foreseen later in June, we hope our concerns will be considered and that the negotiation process will move forward in a swift and constructive manner.

“Looking at the ambition and significant level on consensus yet to be found, we strongly encourage both parties to agree on sufficient time to achieve a high-quality outcome that will preserve a level playing field and an optimal result for both parties.”

Read the full joint statement.

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