'Political in-fighting has taken priority over the economic realities' - UK feed group aghast at Brexit plans

© istock/Gutzemberg

An EU divorce without single market access or customs union membership poses a huge threat to the UK food and agriculture industries, says agribusiness trade group.

David Caffall, chief executive of the Agricultural Industries Confederation (AIC), which represents the feed, crop protection, and grain and oilseed sectors, was reacting to today’s speech by UK PM, Theresa May.

Clarifying the UK’s exit strategy, the prime minister said the UK could not remain within the single market after it leaves the EU.

However, she said she the UK will seek a new "comprehensive free trade agreement,” giving it "the greatest possible access" to the single market. May announced the UK would sign new trade agreements with other countries outside of the EU.

The PM also said the UK priorities would include control of immigration rights of EU citizens in the UK and UK citizens in the EU. 

She confirmed the UK parliament would vote on the final deal agreed between the UK and the EU.

Spectre of tariff levels under WTO rules

“May’s speech confirms that political in-fighting over migration figures havs taken priority over the economic realities of income generation and industries such as agriculture and food. Inside or outside of the EU, Europe remains the UK’s biggest market place.

“The increasing spectre of tariff levels under world trade organization (WTO) rules pose ever greater threats to our ability to continue competing in traditional markets. This, in turn, threatens the sector’s ability to generate taxation income for the UK Exchequer,” said Caffall, in a statement emailed to FeedNavigator.

Lifeline for UK agribusiness sectors

Given May’s signal of the likely direction of forthcoming negotiations, the AIC said it believes it is even more imperative that UK government offers a lifeline to the animal feed, crop protection and grain and oilseeds sectors, through a “rapid re-evaluation” of the regulatory structure going forward rather than simply rolling over regulations from the EU. 

“For instance, a return to risk based analysis for plant protection products with a regulatory structure based on proper scientific evaluation must be in place the moment our disengagement from the EU takes place,” said Caffall.

Such moves would afford the UK industry fresh opportunity to trade with other evidence-based market places beyond Europe, he argued.

However, even with these moves, the marketplace will be extremely tough, as many lower cost producers are already established in these third country markets.

“The government talks constantly of opportunities, but today’s speech by the prime minister closes the door on existing opportunities. Any chance of realizing other options requires the UK negotiating stance to place business along with job retention and creation much closer to the centre the UK ambitions for over the next two years,” concluded Caffall. 

Irish reaction: concern over hardline stance 

Ibec, the group that represents Irish business, today said it was deeply concerned at the increasingly definitive and hardline position of the UK government to Brexit.

It said any move by the UK to unilaterally forge new global trade deals was at odds with membership of the current EU customs union and was a combative starting point to talks. A UK departure from the customs union as it currently stands could seriously disrupt trade between Northern Ireland and the Republic, and deeply damage UK Irish economic relations, stressed the trade group.

Ibec CEO, Danny McCoy, said: “The possibility of the UK leaving both the single market and the customs union raises fundamental questions about Ireland's future trading relations with the UK. A return to WTO rules would be a significant economic shock to the economy and would hit Irish exporters hard. It would also set the UK and Ireland on very different economic trajectories.

"In the interest of maintaining good business relations, it is vital that the UK Government sets out in more detail how the serious challenges presented by a hard Brexit might be addressed, including the impact on cross border trade on the island of Ireland."

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