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Brexit and the Spanish agro-food sector

Spain exports agro-food products to the United Kingdom worth 4,000 million Euro, 10% of the total, but companies fear risks derived from Brexit and a possible rise in costs. Several experts debated this issue in the framework of the event "Brexit and the Agro-food sector: Need for proactivity", organised in Madrid by the consultancy firm Vinces in partnership with FIAB and CEOE.

The general director of agricultural production and markets, Fernando Miranda, explained that the Ministry of Agriculture and Fisheries, Food and Environment (Mapama) is concerned about everything about the fishing sector and the financial agreement that may have an impact on the Common Agricultural Policy (CAP)
. Miranda understands that Brexit should not affect the current period, which will come to an end in 2020.

He also recalled that there are Spanish horticultural companies operating in the United Kingdom that need foreign labour to be able to remain viable businesses and which could be affected, as well as Spanish agro-food entities with capital participation in British firms.

Miranda hopes that the future relationship "will have a minimal impact on trade," taking into account that the UK will be a third country for the European Union (EU) and "things will not be as they have been so far." In fact, London has already stated that it does not wish to participate in the single market or in the customs union.

For his part, FIAB director general Mauricio García de Quevedo estimated the Spanish agro-food sector's trade surplus
with the United Kingdom at 2.5 billion Euro, with wine, oil and pork as the main categories.

Among the risks or uncertainties of Brexit, García de Quevedo mentioned the imposition of customs duties affecting exports, non-tariff barriers and legislation, which will no longer be shared with the EU (sanitary, phytosanitary or nutritional labelling, for example), as well as the budgetary constraints it will entail for the Common Agricultural Policy (CAP).

In his view, when the negotiations come to a close, there must be a long period of "disengagement" in order to prevent harm to companies.

GM&Co founder José Miguel Flavián pointed out that the United Kingdom imports between 40 and 60% of the food it consumes. They spend about 200,000 million pounds; and 20% of Spanish agro-food exports go to a destination that appreciates good wines, olive oil or sausages.

Some of Brexit's consequences for Spain, as stated by Flavián, may include border queues that could slow down exports after the "disconnection",which is bad for perishables such as fruits and vegetables, as well as shortages at specific times and uncertainty on legislative changes.

London could, in the future, prefer to sign trade agreements that would damage the interests of Spanish exporters for the benefit of wine or lambs from Australia or New Zealand, US beef or poultry, or fruit and vegetables from Morocco or Egypt. The devaluation of the pound and doubts about whether the United Kingdom will respect the Protected Designations of Origin are other factors.

The director of the Department of Companies and Associated Organizations of CEOE, Javier Calderón, stressed that bilateral relations are currently very fluid and intense, although he acknowledges the "uncertainties" generated by the British disconnection.

Source: efeagro.com

Publication date: 9/28/2017


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