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Exports to the UK: will Brexit have no impact?

03/01/2020 - François-Xavier Branthôme - Lire en français
The United Kingdom leaves the EU: 10 key dates
On 23 June 2016, in a referendum organized by former Prime Minister David Cameron, 51.9% of Britons choose to leave the EU.
On 29 March 2017, the representative of the United Kingdom to the European Union delivers the letter triggering Article 50 to Donald Tusk, President of the European Council. On 31 March 2017, the Twenty-Seven present the main lines of their approach and positions regarding a number of key points (the budget, the status of European residents and the border with Ireland).
On 8 June 2017, Theresa May is reappointed after the relative victory of the Conservative party in early elections. Official negotiations between London and the European Union begin on 19 June in Brussels.
On 13 November 2018, after 17 months of talks, the British government finally announces that a general agreement on the exit of the United Kingdom from the EU has been found in Brussels. This compromise, which provides for the possibility of maintaining the United Kingdom in the European customs union (the "backstop", or "safety net"), is ratified on 25 November by the Twenty-Seven, but it is massively rejected, a first time, by the House of Commons on 15 January 2019.
On 13 March 2019, British MPs confirm the rejection of the “backstop” principle and specify, for the second time, that they will refuse an exit without agreement. The British government is forced to submit a project to postpone the Brexit date, which is then postponed to 12 April 2019. But all the votes organized in March and early April definitively reject the exit agreement negotiated by Theresa May: on 5 April, the Prime Minister sends an official request for a further postponement until 31 October 2019, which is accepted by the European Council. In the aftermath of the European elections of 23 May 2019, Theresa May announces her resignation for 7 June 2019.
On 23 July 2019, the “Brexiteer” Boris Johnson is elected leader of the Conservative Party and therefore becomes Prime Minister. He is responsible for finding a solution for Brexit before the planned exit date set for 31 October 2019. After a period of confusion linked to the suspension of Parliament's activities, Brussels and London agree on 17 October on a new exit agreement, which must be validated by the British Parliament.
On 19 October 2019, the members of the House of Commons decide to postpone their vote and ask the European authorities to postpone Brexit until 31 January 2020. Finally, this date is approved by the representatives of the Member States, meeting in Brussels on 28 October.
On 12 December 2019, early elections are won by a large majority by the Conservative Party of Boris Johnson; the vote of MPs seems definitively acquired. It should happen before Christmas.

As yet, little impact on quantities from the “Brexit effect”
The effects of these different milestones and decisive events taking place in the course of negotiations for the UK’s exit from the EU have left a clear mark on the pattern of the exchange rate between the British pound and the euro. The high probability of an early resignation of the Prime Minister in May, the coming to power of the leader of the Conservative Party in July, the uncertainty of September, the prospect of a Brexit expected in early 2020 – all of these events have alternately worried or reassured British financial circles. Mid-December, the British pound was trading at almost 1.20 euros, a level it had not reached since July 2016 (about a month after the referendum organized by Prime Minister David Cameron).
Evolution of the GBP/EUR exchange rate

Conversely, it is difficult at the moment to discern a clear "Brexit effect" on the characteristics of British supply patterns for tomato products. June 2016 does not coincide with any significant change in terms of the quantities imported. The dynamics of foreign purchases of pastes, perhaps the most sensitive category, do not seem to have recorded a marked slowdown or acceleration between the period 2013-2016 and the period 2016-2019. The British market imported an annual average of 158 000 metric tonnes of paste for the first three marketing years considered, and 164 000 mT for the last three. Overall, however, the average annual growth slowed slightly after summer 2016, without it being reasonably possible to correlate this commercial tremor with political events.
Neither does the prospect of Brexit seem to have caused any increase in the pace of supplies shipped in from the canned tomato category, traditionally the most dynamic in the United Kingdom. The growth (CAGR) observed up until the summer of 2016 is comparable, although a little faster, to that observed after this date, insofar as the quantities imported continued to grow at an average rate close to 4% over the six years considered.
The picture is almost identical in the sauces sector, where the decision to leave the EU has not had any particular impact on trade with the United Kingdom. The quantities supplied between 2013 and 2016, growing steadily over the period, amounted to around 166 000 mT annually. Development continued between 2016 and 2019, though at a slightly slower pace, taking annual quantities to approximately 180 000 mT.

 The past few months have not changed the supply patterns of the UK market either. Quarterly purchases of pastes in the third quarter of 2019 were slightly lower than the average for the corresponding periods of the previous five years, a drop that must be put into perspective as the trade flows had actually been slightly higher than the same average over the two previous quarters. Over the past six years, quarterly quantities have varied very little around a usual average of about 40 000 mT.
Quarterly purchases of canned tomatoes remained completely stable in the third quarter of 2019, in direct line with the growth dynamics of the sector, with a gain of 2% compared to the volumes imported on average over the same period of the previous five years. Apart from an exceptional increase at the start of 2019, offset by slight dips in the following quarters, the usual quantities of canned tomatoes imported each quarter by the United Kingdom have been recorded at around 82 500 mT.
The sauces category also saw no significant change in the third quarter of 2019, apart from a slight drop after a significant increase in the trade flow in the first half. Sauce supplies have been practically linear for several years, around a quarterly threshold of some 43 000 mT.

For all three categories, the distribution by origin of imported products has hardly changed in recent years, remaining primarily European.

Some complementary information
Quarterly imports of pastes have remained almost unchanged as a result of the Brexit effect, as shown by the virtual absence of variations in recent years around an average close to 40 000 tonnes.

For pastes as well as for canned tomatoes and sauces, the origins of products imported into the United Kingdom have remained broadly stable over the past six years.

Source:, TDM

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