Project Fact: With the End of the EU Transition Period, UK Trade Is Pivoting Away from EU Producers. This is What “Global Britain” Looks Like.
In January 2020 (last year) the United Kingdom imported 34,513 tons of Fresh Food produce from the Netherlands, and 20,236 tons from Morocco. In January 2021 (this year) the UK imported 25,495 tons of Fresh Food from the Netherlands, and 30,648 tons from Morocco.
So, the Netherlands has just lost 9,000 tons of food exports to the UK in one month, year on year, whereas Morocco has gained 10,000 tons, changes of more than 25%.
As predicted by Brexiteers, and contrary to Project Fear hysteria about food supply and security, UK trade is simply pivoting away from producers in the EU, to producers outside the EU. This has quietly been going on since 2016.
In 2020 this page already highlighted that between January 2019 and January 2020, EU agri-food exports to the UK fell by over 25%. So, this decline in trade for the Netherlands is only the latest step in them losing a key market for their intensively farmed food.
In terms of the wider picture, in 2019, whilst UK exports with the rest of the world outside the EU rose by 13.6% and even grew with France and Germany, exports to the Netherlands declined by 8.9%, as the “Rotterdam Effect” on both UK exports and imports was being unwound, and more UK-specific trade returns directly to UK ports. So, Brexit really is a perfect storm for the Netherlands right now which has specialized as the trading “gateway to Europe”.
Morocco, which is a far less developed or intensively farmed country, that is much further away logistically has outcompeted and leapfrogged the Netherlands as a food exporter to the UK. The Netherlands by comparison, is the World’s second largest exporter of Agri-Food in the world behind the United States.
This is a major achievement, and this shift is due to supply and price factors as it comes before the UK imposes any additional customs controls on EU goods, particularly on food, as required by the EU-UK Withdrawal Agreement. The UK had initially waived such checks for the first 6 months but intends to extend this further, partly due to the issues with the Northern Ireland Protocol.
So, in many ways Brexit has not yet really happened for EU producers, unlike for UK producers who have faced the wrath of EU bureaucracy and paperwork when trying to export across the Channel. The Netherlands should expect further declines in trade when this happens and trade friction becomes a reality for them too.
Moroccan exports to the UK risk getting caught up in that trade friction when it comes, but to this end, a new direct ferry is being introduced to bring produce directly from Tangier Med Port (which is now a world leading Freeport) to Poole in Dorset, bypassing EU or UK bureaucracy and reducing transit times to 3 days.
The ultimate aim of Morocco is to catch up and overtake Spain, which is the UK’s leading fresh food trading partner (and of foodstuffs that mostly cannot be grown in the UK). To this end, Morocco rolled over its existing EU trade agreement with the UK in 2019 but with new ambitions to open up both markets on top. This trend is likely to be repeated with other countries across the world all lining up to take EU market share in the UK.
This is what “Global Britain” looks like.
The EU’s reaction to preserve political power, has been to shoot its own companies in the foot who now must face the realities of quite a hard Brexit, even without tariffs and quotas. Initially, in 2016 no one realistically expected the UK to end up outside the Single Market and Customs Union, but the EU’s behaviour over four years helped to seal a more distant relationship that will put EU countries on a par with Non-EU countries. They have actually encouraged their own worst nightmare by trying to stop Brexit.
What this means is more competition in the UK Single Market between foreign producers, those of whom from the EU, now have to compete on a level playing field with producers from other parts of the world, rather than trade that was hiding behind a significant tariff wall and the EU’s Common Agricultural Policy which inhibit rationale economic decisions and investment through mispricing of agricultural goods. This is great for UK productivity, economic growth, investment and competitiveness.
So, it is the UK itself that will becomes the true “Level Playing Field” and not the EU, being a place where goods are traded at World prices and not EU prices, and without trade or non-trade barriers wherever possible.