Tag: Brexit

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Impact of Brexit on the EU budget

In a post last month, I made some estimates of the likely impact of Brexit on the CAP budget and which member states would have to stump up if overall CAP spending were to be maintained following a UK exit from the EU. These estimates were based on particular assumptions about how to calculate member states’ notional contributions to the CAP budget and how to calculate the CAP share of the overall UK rebate.

Of course, Brexit would have budgetary consequences not only for the CAP but for the UK net balance of contributions to all EU policies and for the overall EU budget. There has been controversy in the UK over the exact size of the UK’s net contribution to the EU budget (which, conversely, also represents the budget gap to be filled by the remaining member states if the level of EU spending in the remaining EU-27 countries and outside is to be maintained after Brexit).… Read the rest

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Impact of Brexit on CAP budget net balances for remaining Member States

Much of the recent discussion on agricultural matters in the fall-out from the UK referendum vote on Brexit in June has focused on the implications for UK agriculture. What agricultural policy will the UK pursue after Brexit? What type of trade relationship will it have with the EU and with other countries? What arrangements might be put in place for seasonal migrant workers who play an important role in the production of certain UK crops?

However, Brexit will also have implications for the agricultural policy of the EU. I previously explored these implications in general terms in this Eurochoices article. In this post, I look more closely at the effect that Brexit will have for the net budget balances (gains and losses) of the remaining EU Member States. This can have an important bearing on the positions individual Member States take when discussing a future CAP reform (see my previous discussion on the role of net budget balances in the CAP).… Read the rest

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UK Brexit and WTO farm support limits

Today, we are pleased to present a guest post by Lars Brink who is affiliated with the Global Issues Initiative at Virginia Tech University and a leading expert on domestic support issues in the WTO Agreement on Agriculture.

Background

Domestic support and Bound Total AMS (Aggregate Measurement of Support) may not be high priority items, compared to market access, in terms of analysing trade distortions. Still, anything that touches on farm support and limits on such support attracts attention. This may apply also in a case of Brexit negotiations. This note is about the WTO domestic support commitment of the United Kingdom in case of a Brexit. It thus concerns the Bound Total AMS of the UK and that of the remaining EU27. The EU refers to the European Communities and the European Union, and EUR refers to European Currency Units (ECU) and euros.

In his immensely insightful post on 5 January 2016 entitled WTO dimensions of a UK ‘Brexit’ and agricultural trade, Alan Matthews raised the possible need to share out the EU commitment between the UK and the remaining EU27 (no, Alan did not make me say this as his price for accepting this post).… Read the rest

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Waking up to Brexit – two weeks on

In Charles Dickens’ Oliver Twist, nine-year old Oliver, fed up with the miserable gruel he and the other boys in the parish workhouse were given, walks up to the master and asks for more. The next day, there was an announcement on the workhouse gate offering five pounds to anyone willing to take Oliver off the hands of the parish.

The UK, it seems, also wants more from the European Union, not only access to the single market but also exemption from the free movement of labour. It has put not one, but two Olivers, to work on this request. Oliver Letwin is the government minister (yet another old Etonian at the top of the Conservative Party) who is responsible for a new unit (the ‘Brexit unit’) within the Cabinet Office. This unit will lead the civil service work for the Brexit negotiations and prepare options and advice for the new prime minister.… Read the rest

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The UK opts for Brexit, what next?

The British people in their referendum yesterday expressed their wish to leave the European Union. It is a decision I deeply regret. I believe it will have negative consequences for the UK in terms of economic growth and possibly constitutional stability. For the EU, it is not possible now to foresee the longer-term consequences. At a minimum, it adds one more dossier to the already overloaded agenda of EU leaders.

The referendum result in itself has no legal power. A British withdrawal only begins when Article 50 of the Lisbon Treaty is activated. EU political leaders in their statement today called on the UK to activate this quickly in order to minimise the period of uncertainty. The UK Prime Minister, David Cameron, has indicated in his statement today that this should be left to a new Conservative Government under a new Prime Minister, who he has indicated should be in place by October.… Read the rest

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Agriculture in the debate over Brexit

The European Council meets this Thursday in the hope that it will agree on a package of measures that will satisfy the UK’s demand for a renegotiation of its relationship with the EU. The details of the package and the main stumbling blocks are spelled out in the Council President Donald Tusk’s invitation to leaders to the Council meeting. The mood music leading up to the summit meeting is constantly changing. Whether this is a careful choreography to persuade voters back home that what will be achieved is a significant deal, or whether the continuing objections will derail a deal will be clearer by the end of this week. If a deal is reached, there is heavy speculation that the referendum date itself could be 23 June.

UK opinion as captured by opinion polling is shown in the chart below. If we mark the official start of the Brexit debate as the date of the UK Prime Minister’s famous Bloomberg speech on 23 January 2013 (still one of the best arguments in favour of the European Union that I have read), those in favour of Leaving were reportedly ahead at that stage.… Read the rest

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WTO dimensions of a UK 'Brexit' and agricultural trade

Following a first round of discussions on UK demands for a renegotiation of the terms of its membership of the EU at the European Council meeting last month, it now seems that the February meeting of the Council will agree on some package of measures and promises in response to UK Prime Minister David Cameron’s demands. It will then be up to Cameron to decide if this package is sufficient for him to campaign to stay in the EU in the referendum promised to take place before the end of 2017 and possibly later this year.

Even if Cameron decides to campaign in favour of staying in, there is no guarantee that the UK voters will follow him. A possible Brexit, or UK exit from the EU, remains a distinct possibility.

If a Brexit were to occur, the UK would have to decide on what agricultural and agricultural trade policy it wished to pursue outside the EU.… Read the rest

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UK Brexit and agriculture

I wrote a post last January on the agricultural implications of a British withdrawal from the EU (Brexit) for agriculture in the rest of the EU. Following submission of evidence to an Irish Parliamentary Committee on the implications of Brexit specifically for the Irish agri-food sector, I have developed the possible scenarios into a longer paper which can be downloaded here.
Although the discussion concentrates on the potential impact on the Irish agri-food sector, the early part of the paper discusses the possible alternative trade arrangements between the UK and the rest of the EU following a potential Brexit which might be of wider interest. Essentially, while I think there is a good possibility that free trade could continue, the UK would lose access to the single market which, over time, will imply higher trade costs between the UK and the rest of Europe compared to the situation where the UK would remain part of the EU.… Read the rest

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Agricultural implications of British EU withdrawal for rest of the EU

This Sunday, the Greek general election may decide if Greece will leave the Eurozone, sometimes referred to as Grexit. None of the likely winners of the election, including Syriza, want this, but if there is an unwillingness to address the restructuring of Greek debt, particularly given Syriza’s promises to dramatically increase public spending, this could be the outcome. Whether Greece would then remain a member of the EU if this were to happen is uncertain, with The Economist arguing this week that, in all likelihood, Greece would have to leave the EU as well.
Later this year, on 7 May, the British general election takes place. The outcome of this election will influence the likelihood of Brexit, namely, British withdrawal, not from the Eurozone, but from the EU. David Cameron, the UK Prime Minister, has promised to hold a referendum on UK membership of the EU in 2017 if the Conservatives are returned to power.… Read the rest