Brexit: noose for Britons and farmers

Are you already tired of Brexit? That could well be, because Brexit still dominates the front pages every day. Numerous scenarios are discussed, although no one knows how the hares will turn out. One thing is certain: for the average Brit, there is a lot at stake. For the Dutch farmer too.

Quite a bit of meat, dairy and vegetables, produced by Dutch farmers, disappear into British mouths. In 2016, the Netherlands exported €38,9 billion to the United Kingdom (UK). This makes the British one of the Netherlands' most important trading partners. Agricultural exports top the list with an export value of €5,8 billion. Within that, meat (€1,3 billion) stands head and shoulders above the rest. Fruit and vegetables (€1,9 billion) are also a large group, although a lot of transit also takes place within this group.  

Tullips, Cheese and clogs
Agriculture symbolizes Dutch exports to Great Britain. It is not for nothing that the British associate the Netherlands as the country of 'tulips, cheese en clogs† The question is: what will become of this reputation when the British withdraw within their own borders. The Netherlands has a lot to lose. Much more than other EU countries, such as Spain and Italy. They mainly smell the chance of more control in Brussels.  

It probably won't get any better than it once was. After all, the British have, perhaps against their better judgement, opted for political secession. The negotiations show that this means more than canceling a membership. They're stuck. The extent to which a political separation also means an economic separation is currently being negotiated. However, the cards that Europe has in their pocket seem to be better. The British especially radiate despair.

According to economist Mathijs Bouwhuis, this is because the British made a catastrophic mistake by applying for 'Article 50' almost immediately. If the UK had not done this, the negotiating position would have been much better. Now the UK has set itself a hard deadline. Until March 2019 there is time to come up with a solution. No one can say whether Brexit is derailing or fizzling. Time is against the British, although Europe obviously has an interest in a stable (trading) partner in the future.

Dangerous experiment?
It is striking that the countries that liberated Europe during the Second World War (WW2) are now stirring up unrest in the world. The British with Brexit and the United States (US) with a rather impulsive, protectionist president. Brexit could be seen as an experiment; how a European country fare without interference from Brussels. Quite a few Dutch people would also like to carry out this experiment, given the election results in March.

The reason for which the EU was ever established, incidentally, stems from the WW2. The European Coal and Steel Community, the forerunner of the EU, was founded in 1951 on the principle: no more war and hunger. In 1972 the British joined to fight together for these values. On June 23, 2016, the British chose to continue on their own. It is not yet clear whether this is a good choice. Maybe in about 10 years. In other words, a rather dangerous experiment. Since the 70s, world trade has grown enormously and has concentrated on trading blocs. In fact, it is impossible to go back to that time. The past is not the future. 

Make concessions
It is possible that the British will trade with Europe on the Norwegian, Swiss or Canadian tour. Any other shape is also possible. The British want to keep access to the European market, but they don't want to pay. Free movement of goods, but not of persons. In order to find a solution, the EU and the UK will have to make concessions. Therefore, as said, it doesn't get any better than now.

Meanwhile, Dutch exports are already experiencing headwinds from the devaluation of the volatile British pound. Slaughterhouses complain about this and onion exporters are also experiencing this. The 'westerly wind' could pick up further when British imports are taxed and restricted in 2019. For the average Brit, there is a lot at stake. Nor for the average farmer in the Netherlands. To be continued…

Also at the National Economic Agriculture Congress, organized by Boerenbusiness, the future of Dutch farmers is discussed. Click here for more information.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness and Food Business. He also closely follows the raw materials markets and focuses on animal proteins such as dairy and meat. He regularly interviews leaders from the agricultural sector and the food world.

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