How Will Brexit Affect The Industry?

European Market

At the recent New York Produce Show and Conference held in December 2016‭, ‬a question was asked by a member of the consumer media‭ ‬during the‭ ‬“Connect with Fresh”‭ ‬media luncheon‭: ‬“How is Brexit going to affect the produce industry‭?‬”‭ ‬Jim Rogers‭, ‬president of the United Kingdom’s Fresh Produce Consortium‭, ‬and Jim Prevor‭, ‬publisher of PRODUCE BUSINESS and host of the meeting‭, ‬took to the answers‭.

Jim Rogers‭:‬‭ ‬Brexit is certainly the biggest decision we have ever made‭ ‬‮—‬‭ ‬certainly in the past 50‭ ‬years‭. ‬We’ve always been very closely associated with Europe‭, ‬but we’ve always had a historical difference with France‭. ‬A federal Europe is proving to be a very difficult situation‭, ‬because all the‭ ‬countries in Europe are now thinking‭, ‬‘Have we really got ourselves into the right type of deal where Brussels‭, ‬which is in Belgium‭, ‬is determining how we run our countries‭ ‬‮—‬‭ ‬not only run the countries‭, ‬but make our laws‭?‬’

The U.K‭. ‬has been one of the first countries to say it’s not happy with parliament being dictated to by these EU commissioners‭ ‬‮—‬‭ ‬not elected commissioners‭. ‬Brexit was a close vote‭, ‬52‭ ‬to 48‭ ‬percent‭, ‬and we are now working on how we’re going to manage this‭. ‬Our prime minister is saying we don’t really know how we are going to negotiate with the Europeans‭.

Now one of the more interesting things is watching this type of election going on in Europe‭. ‬There was a recent election in Austria‭, ‬which did not really change much‭; ‬but in Italy‭, ‬they rejected the policies of the European Union‭. ‬Now they have a way to go‭, ‬but it’s possible that the new prime minister of Italy might follow what Britain did with the Brexit vote‭. ‬If Italy joins the U.K‭. ‬and‭ ‬exits the EU‭, ‬it could be the start of the demise of the European Union‭. ‬I am not hoping that’s what happens‭, ‬because I think it could cause chaos around the world‭. ‬We are hoping that we can negotiate a deal with the EU‭, ‬whereby we still remain in the single market‭.‬

How do I think it’s going to pan out‭? ‬I think it will pan out because we’re a big market for the Europeans‭. ‬The Germans produce so many cars‭, ‬and outside of Germany‭, ‬the U.K‭. ‬is its biggest market‭. ‬If‭ ‬they decide to put up tariffs and then we put up tariffs‭, ‬it’s going to hurt the German economy as much as ours‭. ‬And with the weakening situation around the EU‭, ‬with other countries coming‭ ‬on behind the U.K‭. ‬‮—‬‭ ‬the Netherlands‭, ‬Czech Republic‭, ‬Poland‭ ‬‮—‬‭ ‬everyone is thinking that the European Union model is not working‭.‬

“We are hoping we can negotiate a deal with the EU‭, ‬whereby we still remain in the single market‭.‬”

>‮—‬‭ ‬Jim Rogers‭, ‬Fresh Produce Consortium

Jim Prevor‭:‬‭ ‬My family was a major exporter of American produce to the U.K‭. ‬prior to the U.K‭. ‬entering the common market‭; ‬but all that stopped because it became impossible to compete on most items once the EU was involved‭. ‬I think the question is about execution‭. ‬And‭ ‬if Prime Minister May called me to ask for my advice‭, ‬I would tell her not to focus so much on Europe but on the rest of the world‭, ‬and opening those markets‭. ‬If she does that‭, ‬Europe would come along for exactly the reasons Jim Rogers is talking about‭. ‬If‭ ‬the U.K‭. ‬announced that the country was going to be a free port and allow every country to export tariff-free into the U.K‭., ‬except the European Community‭, ‬I think the German car manufacturers would pick up the phone and call their prime minister and say‭,‬‭ ‬‘We can’t have Japanese and American cars going into England at a lower tariff rate than we have‭.‬’‭ ‬All of a sudden they would respond‭.

I think there are all kinds of possible talk‭. ‬People have proposed reviving relationships with the former colonies‭, ‬forming a‭ ‬‘liberty coalition’‭ ‬with the United Kingdom‭, ‬the United States‭, ‬India‭, ‬Canada‭, ‬Australia and New Zealand‭. ‬It just took the EU 11‭ ‬years to negotiate‭ ‬a Free Trade Agreement with Canada‭, ‬which the U.K‭. ‬could probably do in an afternoon‭. ‬So there are so many opportunities‭.‬

I think it’s very tangible and obvious where the pain is from Brexit‭, ‬but it’s hard to see where the benefits will be‭; ‬they is more to be determined‭. ‬But someone in the future might organize their business‭ ‬to take advantage of free trade and open trade between India and England‭, ‬the United States and England‭, ‬etc‭.‬

Just remember‭, ‬what is the common market‭? ‬It’s just a large tariff on everyone else in the world‭. ‬It’s been 50‭ ‬years since the U.K‭. ‬negotiated a trade agreement‭. ‬There is no one experienced in the country at that‭, ‬but they learn‭ ‬quickly‭, ‬and I think they can really help the country in the end‭. ‬Certainly‭, ‬there are many routes to prosperity‭, ‬and I think some of them will allow for greater trade between the United States and the United Kingdom‭.‬