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Post-Brexit: Positive opportunities

26 Jul 2016

There has been a lot of scare mongering about the future post-Brexit but as with any change, opportunities will arise.

What does future trade within the EU look like? The UK relies on over 70% of its agricultural imports from the EU and over 60% of UK agricultural exports are made to the EU. A favourable post-Brexit trade agreement with the EU is vital and the options for Worldwide trade outside of the EU must be negotiated.

There are many possible options available for post-Brexit trade within the EU. Some of the most talked about models include:

  • The ‘Swiss’ option – under this model the UK would be outside the EU Single Market and the EU Customs Union but it would need to remain compliant with many EU rules and regulations.
  • The ‘Norway’ option – gives the UK autonomy to control its own external trade policy while still having access on a tariff-free basis to the EU’s Single Market. The UK would not have entry to the EU Customs Union.
  • The ‘United States/Canada’ option – a complete severance from the EU and full UK sovereignty.
  • The ‘World Trade Organisation (‘WTO’)’ option – the UK will rely on the WTO’s existing multilateral trade agreements and would not need to comply with EU rules and regulations.
  • The ‘Turkish’ option – the UK would be free from the majority of EU rules and regulations. It would be outside the EU’s Single Market but inside the EU Customs Union.

Within the UK, a lot of post-Brexit planning was taking place long before the vote on behalf of the rural sector.

The Tenant Farmers Association are exploring opportunities to develop a viable, sustainable farming policy. They are in talks with Government and suggest a policy with:

  • A focussed agri-environment scheme which rewards environment management on an individual-basis;
  • An infrastructural grant scheme to encourage farm business development; and
  • The use of public funding in the promotion of British farm products, funding local market research and more.

The CLA view Brexit as the biggest opportunity to make positive changes to the UK’s rural economy in over four decades and they are working with the Government to put in place a framework for success in creating new opportunities for trade outside of the EU. They have outlined 6 principles for building a sustainable rural economy for a “World-leading food, farming and environmental policy” which focus on value for money; food security; environmental enhancement; a dedicated UK budget; clear regulation; and, a productive competitive farming and forestry sector.

The CLA believes that new policy, regulation and trade agreements can build a more sustainable, competitive and successful, rural economy. However, there are of course still concerns despite a positive outlook for the future – the CLA outline the importance of, for example, the Government reducing uncertainty in so far as possible by providing reassurance and clear-cut guidelines to the rural sector.

So what should we take from all of this? The agricultural sector has been under increasing pressure over the last few years. Implemented correctly, the new policies could ensure that UK farming is more competitive and resilient and that regulation of the sector is simpler and more transparent. Whether you voted “in” or “out” the future is changing. There will be opportunities to be had as the post-Brexit position develops and perhaps, this time, the “grass will be greener”.

For further information, please contact Alison Hall, Partner at Hay & Kilner

Call: 0191 232 8345

Email: Alison.Hall@hay-kilner.co.uk