Brexit Deal Assures Tariff-Free, but Not Frictionless Trade for Producers

Summary

Brexit has finally been real­ized with a last-minute trade deal between the E.U. and the U.K., pro­vid­ing relief for E.U. exporters exempt from tar­iffs. Despite changes to trad­ing goods and reg­u­la­tory com­pli­ance checks, the trade deal secures a pos­i­tive out­look for both par­ties mov­ing for­ward.

After years of painful nego­ti­a­tions, Brexit has finally become a real­ity, with a trade deal agreed between the European Union and the United Kingdom at the eleventh hour.

The fact that a deal was reached and rat­i­fied is a relief for E.U. exporters to the U.K. They will be exempt from tar­iffs, which would have been applied if the U.K. had defaulted to the World Trade Organization (WTO) rules.

Rafael Pico Lapuente, the exec­u­tive direc­tor of the Spanish Association of Olive Oil Exporting, Industry and Commerce (Asoliva) told Olive Oil Times, ​“the news is good in the sense that there are no fixed tar­iffs for the United Kingdom import­ing oils from the European Union.”

While there are no changes to tar­iffs this does not mean it is com­pletely busi­ness as usual as some changes to the process of trad­ing goods will occur, as was expected.

According to the European Commission, ​“As of 1 January 2021, cus­toms rules required under E.U. law will apply to all goods enter­ing the cus­toms ter­ri­tory of the E.U. from the United Kingdom, or leav­ing that cus­toms ter­ri­tory to the United Kingdom.”

Even though there is a trade deal, goods traded between the E.U. and the U.K. will be sub­ject to reg­u­la­tory com­pli­ance checks. This will mean addi­tional paper­work, such as cus­toms dec­la­ra­tions, and this adds an extra layer of com­plex­ity for importers and exporters.

“The United Kingdom became a third coun­try like any other, in which it will be nec­es­sary to do all the doc­u­men­ta­tion and export require­ments from Spain and the European Union to the United Kingdom for imports from third coun­tries of all doc­u­men­ta­tion and phy­tosan­i­tary cer­tifi­cates that until now there was no need to do,” Pico Lapuente said.

One issue this poses is a delay to goods being processed and cleared through cus­toms. It is a risk but one that should improve with time.

According to the Trade and Cooperation Agreement pub­lished by the U.K. gov­ern­ment, both par­ties will ​“work towards the fur­ther sim­pli­fi­ca­tion and stan­dard­iza­tion of the data and doc­u­men­ta­tion required by cus­toms and other agen­cies.”

“At the begin­ning of every­thing, there will always be a small delay in the clear­ance of ship­ments made to the United Kingdom because you will have to hire cus­toms agents. Also, in the United Kingdom importers will have to process all the nec­es­sary doc­u­men­ta­tion for imports at their cus­toms,” Pico Lapuente said. However, he does not believe it will be a big prob­lem.

In any case, Spain has sent olive oil mer­chan­dise in advance to the United Kingdom, to mit­i­gate any poten­tial issues.

In terms of com­pe­ti­tion and changes to the mar­ket, the U.K. has already struck up new trade deals with some coun­tries and there will no doubt be more agreed this year.

“We are care­ful to see how the exports of other pro­duc­ing coun­tries that do not belong to the European Union evolve because they will not have tar­iffs and the rest,” Pico Lapuente said. ​“We will adapt with­out a major prob­lem.”

Meanwhile, Cristina Stribacu, an olive oil pro­ducer in Kalamata, Greece, told BBC News, ​“We are afraid if our prod­uct becomes very expen­sive, maybe the higher prices will influ­ence the sit­u­a­tion and peo­ple will choose not to have pre­mium olive oil in their diet. However, I want to be very pos­i­tive and opti­mistic that the appetite for healthy food will not change in the U.K.”

Overall, the mood is pos­i­tive. While there will inevitably be some minor delays as the tran­si­tion to the new process takes place, hav­ing the trade deal secured with no tar­iffs is a big vic­tory for both sides.

• UK Government
• European Commission
• BBC News