Eurinco is a consortium of independent advisers on European and UK national policy on farming food and the environment. We have advised mainly UK clients on European policy since established in 1997.
Since February 2016 we have also advised mainly rural businesses on the implications of the UK decision to leave the EU and the European Economic Area.
We help businesses to assess for themselves the probability of various Brexit outcomes and the potential impact of each potential outcome on their sector and their particular business.
This puts businesses in a stronger position to assess and mitigate the risks, and also to identify and exploit the opportunities of Brexit.
The opportunities of Brexit may come to businesses which are better prepared than their competitors to weather the impact of Brexit on the sector.
There will also be opportunities for some arising out of any failure to reach agreement on a future trade relationship with EU, since this would lead to tariffs and other obstacles to trade on imports from EU as well as exports to the EU.
Even after UK formal exit from the EU in January 2020, and pending the outcome of trade negotiations, uncertainties remain about the nature of Brexit and its impact on the business.
The ‘no deal’ outcome on trade, which most businesses assumed in 2016/17 to be so unlikely as to make it not worth preparing for, is now a real risk (see separate section contrasting EU and UK negotiating mandates Feb ’20).
‘No deal’ (sometimes now referred to as an “Australia deal”) happens if UK and EU negotiators fail to reach agreement on a free trade agreement before July 2020, though negotiations could be extended to the end of the year.
Under WTO rules (largely unenforceable since Dec ’19 – see separate section), failure to reach agreement on a basic free trade agreement, as set out in the political Declaration of October ’19, means that both EU and UK are obliged to treat each other as any other third country.
EU would then be obliged to apply the same tariffs on goods from UK as it does to those from other third countries. Those tariffs are generally much higher for agricultural commodities and products (averaging about 12%).
It is not widely understood that UK would under the same rules be obliged to place the same tariffs and non-tariff barriers (NTBs) to trade with EU, and on imports from EU, as it does on goods from any third country.
UK can if it wishes reduce all its tariffs unilaterally, but must do so for third countries (as announced in 2018) in exactly the same way. Government has since realised that this would make it unlikely that third countries would agree to negotiate new FTAs (or even to roll over existing EU FTAs) since they would secure most of the concessions they seek without the need to reciprocate.