Welsh farmers, food producers and most likely all other industries breathed a sigh of relief when a Free Trade Agreement (FTA) between the UK and EU was finally agreed on 24th December 2020.
Along with the deal came the EU’s formal listing of the UK as a Third Country, long-awaited confirmation which was essential for allowing Welsh food exports to the EU to continue.
Following the announcement, Welsh Government stated that “it had not had any meaningful involvement in developing the negotiating strategy” and that the deal will mean “fewer jobs, lower wages, less exports” and “more red tape for businesses.”
Despite avoiding a no deal Brexit and tariffs of 50% of more on some agricultural products, our access to the EU market, which is the destination for three quarters of Welsh food and drink exports, is still facing significant non-tariff barriers which had been estimated to increase costs by 4 to 8 percent.
Even the UK Government had predicted that in a reasonable worst case scenario, 40 to 70 percent of HGVs arriving at ports after the end of the transition period could be turned away due to not having the correct documentation. So much so that Welsh Government had implemented contingency measures for HGVs to be redirected from Holyhead Port if necessary.
With current export volumes estimated by some to be around 20 percent of typical levels, some EU buyers are said to have begun rejecting UK shipments and cancelling future orders due to delays and paperwork complications.
60 percent of those who attended the FUW Webinar ‘EU Exit: What do farmers need to know from 1st January 2021?’ believed we would leave the EU with a deal, and they were correct, however the next 12 months are going to be vital for improving new procedures and tying up loose ends.