How Will Brexit Affect The Industry?
January 1, 2017 | 3 min to read
At the recent New York Produce Show and Conference held in December 2016, a question was asked by a member of the consumer media during the “Connect with Fresh” media luncheon: “How is Brexit going to affect the produce industry?” Jim Rogers, president of the United Kingdom’s Fresh Produce Consortium, and Jim Prevor, publisher of PRODUCE BUSINESS and host of the meeting, took to the answers.
Jim Rogers: Brexit is certainly the biggest decision we have ever made — certainly in the past 50 years. We’ve always been very closely associated with Europe, but we’ve always had a historical difference with France. A federal Europe is proving to be a very difficult situation, because all the countries in Europe are now thinking, ‘Have we really got ourselves into the right type of deal where Brussels, which is in Belgium, is determining how we run our countries — not only run the countries, but make our laws?’
The U.K. has been one of the first countries to say it’s not happy with parliament being dictated to by these EU commissioners — not elected commissioners. Brexit was a close vote, 52 to 48 percent, and we are now working on how we’re going to manage this. Our prime minister is saying we don’t really know how we are going to negotiate with the Europeans.
Now one of the more interesting things is watching this type of election going on in Europe. There was a recent election in Austria, which did not really change much; but in Italy, they rejected the policies of the European Union. Now they have a way to go, but it’s possible that the new prime minister of Italy might follow what Britain did with the Brexit vote. If Italy joins the U.K. and exits the EU, it could be the start of the demise of the European Union. I am not hoping that’s what happens, because I think it could cause chaos around the world. We are hoping that we can negotiate a deal with the EU, whereby we still remain in the single market.
How do I think it’s going to pan out? I think it will pan out because we’re a big market for the Europeans. The Germans produce so many cars, and outside of Germany, the U.K. is its biggest market. If they decide to put up tariffs and then we put up tariffs, it’s going to hurt the German economy as much as ours. And with the weakening situation around the EU, with other countries coming on behind the U.K. — the Netherlands, Czech Republic, Poland — everyone is thinking that the European Union model is not working.
“We are hoping we can negotiate a deal with the EU, whereby we still remain in the single market.”
>— Jim Rogers, Fresh Produce Consortium
Jim Prevor: My family was a major exporter of American produce to the U.K. prior to the U.K. entering the common market; but all that stopped because it became impossible to compete on most items once the EU was involved. I think the question is about execution. And if Prime Minister May called me to ask for my advice, I would tell her not to focus so much on Europe but on the rest of the world, and opening those markets. If she does that, Europe would come along for exactly the reasons Jim Rogers is talking about. If the U.K. announced that the country was going to be a free port and allow every country to export tariff-free into the U.K., except the European Community, I think the German car manufacturers would pick up the phone and call their prime minister and say, ‘We can’t have Japanese and American cars going into England at a lower tariff rate than we have.’ All of a sudden they would respond.
I think there are all kinds of possible talk. People have proposed reviving relationships with the former colonies, forming a ‘liberty coalition’ with the United Kingdom, the United States, India, Canada, Australia and New Zealand. It just took the EU 11 years to negotiate a Free Trade Agreement with Canada, which the U.K. could probably do in an afternoon. So there are so many opportunities.
I think it’s very tangible and obvious where the pain is from Brexit, but it’s hard to see where the benefits will be; they is more to be determined. But someone in the future might organize their business to take advantage of free trade and open trade between India and England, the United States and England, etc.
Just remember, what is the common market? It’s just a large tariff on everyone else in the world. It’s been 50 years since the U.K. negotiated a trade agreement. There is no one experienced in the country at that, but they learn quickly, and I think they can really help the country in the end. Certainly, there are many routes to prosperity, and I think some of them will allow for greater trade between the United States and the United Kingdom.
Article 12 of 17
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