Quote:
Originally Posted by Gerard C
What could be the reason why we've been told that the UK contribution will affect business here, specially agriculture? We've been talking about that on the forum and mainly bad organisation/ low efficiency structures/ laziness were pointed.
As Peter says, there will be several effects to the Brexit, business wise and money wise. I guess euro politicians are trying to hyde this from the public. At the moment.
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In the EU agrarian policy is one of the original and prime fields of EU activity.
EU farms are heavyly subsidised (including UK farms), the cost used to be funded by the consumers through high prices (less so by governments).
EU was commited, for historical reasons to make sure that farmers make enough money
Overall the subsidy level has come down a lot, not by EU choice but because of GATT rulings (the most important one brought forward by Thailand).
But still, farmers in EU enjoy a high level of protection and EU generated income. EU has just switched from regulated prices to a sort of pension system.
Should UK go completely free trade (unlikely, in my opinion, but would fascinating to see what happens) the UK farms will suffer extremely severely, because then the cheapest farming in the world will export to UK and ruin price level. NZ sheep farming can then make its impact on UK farms, and guess who has lower production cost.
Why anybody connected with UK farming has voted leave is beyond me.
(I trade professionally in sugar and feedstuff and grain products, so know what I am talking about.)
That is the greatness of the EU trade deals that we managed to get free trade access everywhere for industrial goods and even food exports and still could protect our farmers, just because the common market is so important.
No way that UK alone can do better deals than that.
Take cars, for instance:
export cars from EU to US, 2,5 % duty
export cars from US to EU 10 % duty
and still the US only have limted access to EU agrarian markes (soybeans can get in, for instance) but the access is limited in many ways, so EU farm production is protected
does not get any better that that
Trump has a point there, its not quite fair
or, going back to my example:
if UK wants to export Ranger Rovers to NZ, than You might have open Your market for NZ farm products (including lamb cutlets) whether one wants that, or not. At least this is how I would negotiate, were I on the NZ side.
This will mean that industrial interest in UK will fight the countryside, and the city dwellers will want cheaper food and be pro free trade and farming would suffer as a result.
Look into late 19th century political debate in Britain, You have been there before, exactly this conflict.
RuE