The negative impact of Brexit for the EU agri-food sector

Wednesday, January 9, 2019

An unclear and foggy future is expected for Brexit’s next day, as the negotiations that have begun, based on Article 50 of the Treaty of the European Union, have not yet made any progress, and the transitional period that will follow is neither clear yet, nor the new trade regime that will be in place. The delays that occur at a political level between the UK and the EU leave the business and commercial players underway especially those who are already entering into contracts with British supermarkets for the coming summer. As Alan Matthews, Emeritus Professor of European Agricultural Policy at the Department of Economics at Dublin’s Trinity College, and one of the most respected agricultural analysts in the EU, states, "traders want to know where they are, and this is currently not at all possible to be resolved especially at the last minute." The possibility of reintroducing customs duties between Great Britain and the EU "would probably lead to a significant reduction, even in the elimination of current trade flows, especially in the agri-food sector".

Alan Matthews is firm in his appraisals. Brexit will have a negative economic impact both in Great Britain and in the European Union but the magnitude of these impact will depend on the trade relations that will eventually be formed – regarding how the negotiations on Article 50 will be completed but also from the transitional period to be agreed upon until a new trade agreement is in place. He himself warns the risk alert if there is no trade agreement. As he explains, the customs clearance process will automatically come back with tight border controls, thus losing direct suppliers’ access to the markets and returning customs duties on both sides.