No trade deal for agriculture sets up UK and EU farmers to fail post-Brexit, says CLA

CLA Deputy President Tim Breitmeyer

Farm businesses across the UK and European Union will lose out if no trade deal is made for agriculture post-Brexit, according to the CLA.

The CLA, which represents 30,000 landowners, farmers and rural businesses across England and Wales, has written to members of the European Landowners’ Organisation (ELO) analysing the implications of a no deal for agriculture and setting out the consequences for both UK and EU farmers in the agri-food supply chain.

CLA President Tim Breitmeyer writes that the implications for the sector “are extremely serious” and will have a “significantly negative economic effect”. He urges EU member states to lobby their governments to ensure a sensible compromise that accommodates the need for frictionless trade between the UK and EU.

He said: “Farmers and other rural businesses rely heavily on frictionless trade and movement of goods across EU borders. A future relationship which imposes barriers to trade or excludes agri-food would put at risk farming businesses both here and in the EU and have a devastating impact across our wider rural economies.

“I have written to farming colleagues across Europe encouraging them to put pressure on their own governments so that the UK and EU can come to a sensible withdrawal deal. It must be in everyone’s best interest to guarantee free trade post-Brexit, so that all involved in the agri-food supply chain can continue to benefit.”

The letter from the CLA President sets out the trade implications for the UK and EU if no deal is reached including:

• The UK would have to trade under World Trade Organisation (WTO) Most Favoured Nation (MFN) status with the EU automatically applying its external common customs tariff on UK exports. There would be significant uncertainty in the market place, leading to negative economic consequences in the short to medium term.
• The imposition of customs controls will also lead to increases in costs in the supply chain for both exports and imports with a probable tariff equivalent cost of over 4%. Costs on goods such as meat will be substantially higher at more than 10%.
• Continuing government policy for cheap food and retailers’ desire to keep prices low could put significant downward pressure on producer price in certain sectors, most notably for lamb.
• Global factors suggesting a reduction in growth in China and South East Asia in 2019 and the imposition of US tariffs on Chinese goods could lead to a global recession in 2020, thus exacerbating the adverse impacts of a no deal Brexit.