You do not undo systems, agreements and regulations which took 40 years to set up, very easily. That is the reality that perhaps the very naïve British Brexit voters will have to come to terms with today. This reality will also remain for many years to come, not only for the people of Britain and the European Union, but also for South Africans who trade with these two entities.
On the eve of celebrating 125 years as Britain’s, and in fact the EU’s oldest Southern Hemisphere supplier of fresh fruit, those in the South African fresh produce industry are also this weekend shifting uncomfortably in their chairs because in their wildest dreams they did not see this one coming in the trade with their traditional markets.
It is clear that most of those who voted for Brexit had no idea what they were letting themselves in for and as time goes on there will be many more unpleasant surprises which they did not anticipated when they got swept away on anti-Europe sentiments.
On this Sunday morning the British know their country has been turned upside down, with no idea where they are going to. They know that their currency has already dropped out of the sky and that their economic outlook has been downgraded. More importantly, the referendum result has split British voters down the middle, which is likely to cause instability for some time to come, completely rewriting the political landscape.
While the South African fruit sector knows that perhaps they will not be affected immediately because of the stipulations that allows a two year period to negotiate the British exit from the EU, it is only a matter of time before they will feel the effect.
Just what this will entail, remains to be seen. In this regard it is important to pay attention to what Philippe Binard, of the organisation Freshfel Europe said in an interview with fruitnet.com. “The situation is very uncertain at the moment. Brexit will require a process that is likely to start soon but we don’t know how long it will take. In the meantime, the UK will remain in the EU – with all of the rights, benefits and obligations that this membership entails,” said Philippe Binard.
In the longer term Mr Binard points out that a big challenge for the UK is that it will have to negotiate as a country with all of the other countries which benefit from free trade access by virtue of their relationship with the EU. ‘Take Chile, for example: to import fruit and vegetables from Chile free of any duty will require a renegotiation, because the default under World Trade Organisation (WTO) rules is that the tariff applies. The same will apply to European produce, such as Spanish oranges or Dutch tomatoes.”
South Africans should prepare themselves for some difficult renegotiations because Mr Binard says each of these agreements will require a long negotiation and take years and years. “We talk about fruit, but there are lots of other industries like electronics or services – that will lose the benefit of EU-wide policies.”
South Africans who in the past negotiated with the EU will elude to the fact that it is a time-consuming and very difficult process. Not only are the people in Brussels screwed negotiators which can keep you at the table for a very long time, new deals will have to be negotiated with the new Britain outside the EU. The agreements previously entered into with the 28 nations which formed part of the EU will most certainly have to be reviewed. Rules made in the WTO to establish preferential treatment are very complex and they have to be agreed one by one. “Perhaps rules can be established more quickly with some Commonwealth countries, but that’s just speculation on my part,” says Mr Binard.
One thing is certain – while the EU has already told Britain they want to exit negotiations to start immediately, they are not going to make things easy for the British. It is also clear that the immediate goal will be to set up trade stability in Europe and a new trade deal between Britain and the EU. It is debatable that South Africa, and other countries outside the EU, will even get a look-in while the deal between the EU and Britain is settled.
South African organic lemon growers, and citrus growers who have been suffering because of the application of EU laws on citrus black spot, may well find themselves in future dealing with at least one part of the ‘old’ European Union where there will be no need to apply the EU CBS rules. Britain do not produce any citrus fruit of note and one assumes that they will not see a need to apply the current CBS rules.
After 125 years of doing business with the UK the country represents a hugely important market for South African fruit. South Africans will be very keen to secure stability in this trade as soon as possible. The same applies to the EU, which South African fruit growers can simply not do without.