Tuesday, November 28

One year since Brexit: How has European exporters affected the UK?

The ills of British exporters to the European Union have been well documented throughout 2021, especially in the first part of the year as a new bureaucratic frontier tied in knots previously smooth operations.

However, turbulence has also been felt on the other side of the English Channel. Although the UK has delayed imposing new import controls, some EU exporters to Britain have felt the full force of the Brexit storm.

The trade agreement The London-Brussels coup in late 2020 excluded tariffs and quotas, but the UK’s exit from the single market and the EU customs union still created significant barriers and costs.

Some agricultural sectors, especially in the northern coastal countries of the EU, have suffered great swings of fortune since Brexit ended frictionless trade with their British neighbor.

Britain’s Brexit roller coaster

Laurent Kerlir, a Brittany dairy farmer in northwestern France, has noticed a difference since the new Brexit rules went into effect last January.

“I sell my milk to a cooperative … then they sell butter, powdered milk and all the converted dairy products, and it is true that we export less to the UK today than yesterday,” he told Euronews.

During the first nine months of 2021, agricultural and agri-food exports to the UK from Brittany in north-western France fell by 19% compared to the same period in 2019, representing a turnover loss of € 53.2 million for the sector, according to a recent report. He chose to make the comparison with 2019 instead of 2020, to offset the effect of the COVID pandemic.

Kerlir can see the effect on the local agricultural industry: he is also chairman of the chamber of agriculture in Morbihan. Department from southern Brittany. Its own sector has been severely affected: Breton cheese and dairy exports to the UK fell 58% in 2021 compared to 2019. Beef and pork exports also fell significantly, 43%, while exports poultry were down 4%.

“The main reasons were the increase in costs and the increase in delivery times, because especially in the first quarter new measures were put in place, which caused delays. For fresh products such as milk and meat, which have a short shelf life, it was very complicated, “says economist Delphine Scheck of the Brittany Chamber of Agriculture, which compiled the figures.

“In the case of dairy products, there were some reservations in advance, which explains why the British had less need to be supplied by Britain’s dairy industry. Lastly, the UK also restricted its own dairy exports, by so the products remained in their territory and there were more goods, “he explained to Euronews.

The loss of one farmer, the gain of another

But where some sectors in Britain lost, others benefited from the Brexit turmoil. Exports of cooked meats from Britain to the UK increased by 51% in the first nine months of 2021 compared to two years earlier; Exports of fresh vegetables increased by 42% and those of vegetable products by a whopping 63%.

Also Read  Nadler-Maloney race tops House and state Senate contests on NY's second primary day

Delphine Scheck attributes that to the chaotic problems on the other side of the English Channel caused by huge gaps in the British workforce post-Brexit, leading to a shortage of some 100,000 truck drivers and 15,000 butchers, as well as seasonal farm workers.

“In the spring of 2021, for vegetables, for example, British gardeners were forced to let their crops rot in the fields because they did not have the labor to harvest them. They had to resort to imports en masse. , for the benefit of the vegetables of Brittany, among others “.

Big companies do better

The whiplash in the post-Brexit world has hit smaller companies more than larger ones. Laïta, a dairy cooperative in western France, has a turnover of 1,300 million euros; Its export team only has 60 people. The UK market accounts for 15% of its business and the company has a UK subsidiary in Somerset with 100 employees.

“I have experts, we have procedures, we know how to deal with export business. It takes a long time but we know how to handle it. Therefore, we are probably less affected than the smaller groups, the smaller companies that are not used to selling abroad. Europe, for example, where procedures are more complicated, “Laïta’s director of consumer goods exports, Yvan Borgne, told Euronews.

“It took a lot of preparation and discussion with the trucking companies to find the right truck at the right time, and sometimes we found the truck, but we had delays, we got the trucks at the last minute.”

Another large European company, Danish-Swedish multinational Arla Foods, also told Euronews that its exports to the UK “so far have not been much affected by Brexit, but of course it poses some challenges.”

A recent European Commission report showed that the value of EU agri-food exports to the UK in the first eight months of 2021 had barely changed compared to the same period last year. “At just € 116 million or 0.4% less than 2020 values, this illustrates a significant rebound in recent months, given how depressed exports to the UK were in the early parts of the year,” he said.

Potato seed ban hits the Netherlands

Several EU sectors exporting to Britain saw a sharp drop in trade earlier this year, before regaining some stability.

“Hopefully there will be some recovery: sectors such as wine, chocolate … the trade in liquors, liqueurs, sheep meat is the least affected. But some trade, for example that of vegetables, has shown a special decline. Thus that there has also been a different impact on different sectors, “Daniel Azevedo, director of raw materials and trade at the European farmers’ organization Copa-Cogeca, told Euronews.

Also Read  Lin-Manuel Miranda gets apology from Texas church for 'Hamilton' show

Potato seed production is an area that has not seen a decline in trade between the EU and the UK, but rather a total collapse. The sector was excluded from the Brexit trade agreement due to failure to reach an agreement on regulatory systems. A six-month waiver for EU exporters to the UK ended in July.

Like their Scottish counterparts, the export ban has hit Dutch producers hard. They used to ship about 18,000 tonnes to Britain each year, more than half of their total exports, mainly for fish and chips.

LTO Nederland, representing Dutch agricultural producers, blames the bad blood between the UK and the EU, and the lack of political will, for not finding a solution and reopening the borders for mutual trade that has existed “for the past few years. last 40 years “.

He suggests that one possibility would be for the UK to follow Switzerland’s lead and accept “dynamic alignment” with EU rules. “Switzerland is a so-called ‘third country’ but it follows EU law. There is no reason why the UK can’t, but the British political situation is not helping,” says his latest Brexit Newsletter (in Dutch).

The Dutch body also complains that the European Commission has shown no sign of the flexibility it has prepared to offer the UK in other areas.

“In the world of potatoes there is no discussion,” he says. “If you look at the space that the EU offers the UK over Northern Ireland, you wonder why this could not be done temporarily for certain products such as seed potatoes. But the European Commission maintains that no exception can be made.”

Recent talks have been held with the participation of the European Commission and Parliament, but so far without apparent progress.

“There must be a solution soon as potato growers in the UK and EU27 hope their seeds will arrive in time for planting this spring. If not, there may be a problem with consumer potato production in various regions.” , an LTO spokesperson told Euronews.

Brexit triggers a market shakeup

Both France and the Netherlands will benefit from a EU emergency fund of € 5 billion created to help European companies cope with the immediate effects of Brexit. The scheme is expected to open in early 2022.

Some of the 889 million euros to be received by the Dutch will go to “a pot for businesses, including agriculture and horticulture,” notes LTO Nederland. Also in Brittany, farmers hope to be compensated with the 753 million euros that France must receive.

Also Read  Here's How the Samsung Galaxy Fold 4 Compares to Five Expected iPhone 14 Features

Meanwhile, many Breton food exporters have managed to offset much of the damage from Brexit by successfully finding other markets, according to the chamber of agriculture.

“What is comforting is to see that Britain has managed to win other markets and other destinations. What is uncertain is whether it is something sustainable that will last over time or if it is rather a unique answer to the problem raised by Covid,” he says economist Delphine Scheck.

Future trade with Britain promises to be radically different. In his words, the Brexit divorce between Britain and the United Kingdom is complete.

“It is obvious that companies already established in the UK have still been able to trade with them. New companies cannot enter the UK market because it is too complicated, they do not even try because it is very complicated in terms of paperwork and so they will look directly to other markets, “Scheck told Euronews.

Impact of UK import controls

The last UK Food and Drink Industry Figures show that EU imports in the first nine months of 2021 fell 8.4% in 2020, and 10.8% compared to 2019. UK exports to the EU performed much worse.

In 2022, EU exporters face the added headache of graduated UK import controls and requirements, which the EU food industry says will have a “considerable impact” on businesses.

However, the UK remains the main destination for US agri-food exports. Producers in Britain say the UK market is too big to ignore.

“For vegetables, milk and poultry, (Great Britain) remains an important country for us for our products,” said dairy farmer Laurent Kerlir.

“We must recognize that, particularly in Brittany, the agri-food industry has shown the capacity to recover, to reorganize (there have been both Brexit and Covid), the agility of the industry has been reassuring. But this has its limits and we look forward to the way forward. be one of discussion. “

Laïta, the large dairy cooperative, also hopes that trucks will continue to transport products across the English Channel from Ouistreham to Portsmouth. After all, the UK is “our number one destination for exports,” says Export Director Yves Borgne.

“It will probably remain one of the largest markets, because the UK is importing 50% of their food needs and food requirements, so they are very dependent on the EU. We need each other, we are interdependent between the EU. and the United Kingdom “. , so the commercial business will continue. We will find a solution. “

This article is part of a five-part series looking at the impact of Brexit, one year later.


Leave a Reply

Your email address will not be published. Required fields are marked *