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The analysis of Gianluca Bagnara

Beyond Brexit - the EU to tackle complex political and economic scenarios

Brexit is not the only thing the fresh produce sector is worrying about - in addition to the effects deriving from Great Britain exiting the EU, the outcome of November's US election might also pose some problems. A weakened British economy seems likely, but we will also have to see how much the EU (and Italy) will be able to maintain their political and economic role in the future.

Economist Gianluca Bagnara says that "so far, the stock markets have reflected what happened. When the referendum result came out, it was the Pound, not the Euro, that devalued. It is a sign of who the market perceived to be the weakest in this situation. The risk of an English secession seems concrete. The City might loose its importance as an international financial hub and, even worse, if Scotland were to leave Great Britain, the latter would lose 90% of its fiscal income, as oil resources are located in the Scottish territory."

In the medium term, the US vote could be problematic for the EU no matter who wins. "The Clintons tend to focus on the Arab world and use Europe and Italy as a passive platform. At the same time, Trump has declared its hostility towards the Arab world but is interested in Russia, leaving Europe aside."

For what concerns the fresh produce sector, the need to diversify destination markets might become a problem. "Trade treaties like the TTIP are defective. I am talking about mutual recognition, i.e. about the idea that what is good for a country is automatically good also for its counterpart. It would have been better if treaties were based on reciprocity, i.e. if you want to operate in my country, you need to follow my rules. This would have been the only way to protect us."

The Asian and African markets are definitely interesting alternatives, but using them only to ship goods is not the right way. "These countries want to produce goods themselves by importing the whole production chain. What we can do here, we can do over there too, otherwise we would be affected by the unstable flows of demand with no roots for a stronger and long-lasting development."
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