This Friday the Prime Minister of the United Kingdom, Boris Johnson, he assured that he will abandon the negotiations if there is no “fundamental change” in the position of the European Union (EU), which would translate into a “hard Brexit.” This situation would put 7.5% of Spain’s annual exports at risk, which are produced with the British country, and they could see how tariffs could increase up to 2.2% if this is finally the outcome.
“According to our calculations, the aggressive trade policy followed by the United Kingdom could lead to a 2.2% increase in import prices in a year and be negative for competitiveness abroad. Analysis has shown that price competitiveness is critical for the United States, while non-price competitiveness is more important for China and Spain. For the UK and France, for example, both price and non-price effects offset each other ”, remarks the latest report by Euler Hermes.
And it is that the British market represents a very relevant country for Spanish exports. Around 8% of agri-food exports go to the islands, with a value of 4,076 million euros, with a positive balance of 2,917 million euros. Currently, our country ranks fifth in Europe as a source of exports to the United Kingdom.
“In the event of a ‘hard Brexit’, import prices would increase by 10.9%. Although in theory lower sterling should boost export volumes, this curve effect might not work for the UK due to its unique economic model. In recent years, although the British pound has lost 3.6% of its real value, exports increased 15%, while the euro appreciated and exports from Austria, Spain and the Netherlands increased 24%, 17% and 16%, respectively ”, add the experts at Euler Hermes.
However, the prospects are not very promising. He British government terminated the dialogue with the European Union (EU) to negotiate a trade agreement that enters into force on January 1, 2021 this Friday, and Prime Minister Boris Johnson blamed the community bloc for the failure, demanding a “fundamental change” in its current negotiating position .
The ‘premier’ assured that it is time to “prepare” for the possibility that the United Kingdom and the EU will not seal any trade agreement on the scheduled date, something that he sees plausible if there is not a “fundamental change” in the position of the community bloc . Despite the firmness in the London notices, from Brussels insist that the channels are still open and that Barnier maintains his plans to travel to London on Monday to attend a new round. “The talks continue”, has settled a community spokesman asked by Europa Press about the British reaction.
Meanwhile, the Ministry of Agriculture, Fisheries and Food (MAPA) is holding various conferences by videoconference with sectors, associations and agrarian and agri-food organizations in the framework of the preparation of Spain for the changes arising from the UK’s departure from the EU. The general director of Agricultural Productions and Markets, Esperanza Orellana, analyzed the situation and evolution of agri-food foreign trade between Spain and the United Kingdom and highlighted the need to prepare for changes that from January 1, 2021 will take place whatever the outcome of the negotiations.