Fepex proposes contingency plan in case of no deal Brexit

The Secretary of State for Commerce and ICEX, together with the Chamber of Commerce of Spain and the Spanish Confederation of Business Organizations (CEOE), organized the first of a series of informative days with the participation of Fepex. It was held in Madrid and the next will take place in several cities across the country. The goal is to urge companies to prepare their contingency plans in the event that the United Kingdom leaves the EU without a deal.

A no deal Brexit would mean that the United Kingdom would cease to be part of the EU on March 30, 2019 and would be considered a third country, which would entail the setting of tariffs, the establishment of customs and non-customs controls, restrictions on the mobility of the workers and even regulatory differences, according to the Secretary of State for Commerce, Xiana Méndez.

The agri-food sector would be one of the most affected by a hard Brexit due to the large volume of exports to this country. One of the consequences would be that all goods protected by geographical indications, such as wines, spirits or food, would lose that protection and "they would only keep it if, for example, the brand had been registered before in the United Kingdom patent office, as explained by the general deputy director of International Trade in Goods, Guillermo Kessler.

According to Fepex, if the United Kingdom is considered a third country in commercial terms, horticultural exchanges would, in the worst case scenario, be governed by the conditions of the World Trade Organization and its customs duties. This could mean the application of ad valorem duties, which would be 12% for cabbages, 8.8% for tomatoes, 12.8% for strawberries or 17.6% for peaches. In a better scenario, one without tariffs, there would be at least an increase in administrative costs. This would include the customs clearance, which Fepex believes should be reduced to a minimum with a customs cooperation agreement. Non-tariff barriers could also be imposed with the reintroduction of phytosanitary certificates and controls, imposing additional requirements on Spanish exports.

In a framework of such uncertainty, Fepex has proposed for the Commission to prepare a contingency plan to avoid disturbances in the EU market. These plans should include measures to support the markets if serious disturbances are observed. Special attention should be paid to the month of April, the first in which the United Kingdom will not be a member of the EU. In April 2017, exports of fresh fruit and vegetables to the United Kingdom amounted to 138,708 tonnes worth 191 million Euro, covering a wide range of products such as oranges, mandarins, strawberries, lemons, blueberries and raspberries in the case of fruits, and lettuce, cabbages, tomatoes, peppers, cucumbers, onions, zucchinis and celery in the case of vegetables.

 

Source: fepex.es


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