Call for extending trade negotiations amid pandemic makes sound business sense
Without doubt one of the most significant news stories of the past week has been the plea from the Caobisco European confectionery organisation for the EU and UK to continue crucial trade talks beyond the fast-approaching cut-off point of December 2020.
The present transition period of one year has been severely overshadowed by the disturbing arrival of coronavirus on the world stage that has dominated headlines for months and taken the agenda away from the domestic political agendas of most global governments.
A host of major public policy initiatives that will impact directly or indirectly upon international trade have had to take a back burner to the all consuming task of tackling the ongoing pandemic, which is thankfully showing signs of at least stabilising for many countries – though the potential of a second wave has been widely anticipated.
The timing of the pandemic is especially challenging in the context of Brexit, as presently, products from Caobisco European members across the confectionery and bakery sector are the top food and drink products traded with the UK, representing more than €6 billion per year.
As we previously noted, biscuits/pastries and chocolate are respectively the second and third most valuable group of food exports from the EU to the UK, and the second and fourth most valuable food imports to the EU from the UK. So these are all market segments that matter a great deal to the economic health of all nations involved.
However, as Michel Barnier, the EU’s chief negotiator in the Brexit process warned back in January, 11 months was even then not sufficient time in order to gain a comprehensive replacement free trade agreement with the UK. Now, with the nation still remaining in quarantine, we only have six months to fashion an agreement. Virtually no substantial agreements have ever been concluded with the European Union in under a year – with the model that many within the UK government have signalled would be most appropriate, would be that between the EU and Canada, which took a total of seven years to fully negotiate.
With the British economy already affected by a decade of austerity that has weakened the pound over the past few years – seven years is just too long a period to wait. But with 40 per cent of our trade still being done with the rest of Europe, strong relations with our closest trading allies is of paramount importance. The food and drink sector, including confectionery, bakery and snacks markets have a not inconsiderable role to play in the overall make-up of future trading relations, so giving both sides time to fathom a comprehensive way forward beyond the end of this virus-hit year, is surely a policy that must be strongly explored to its fullest extent.