CARIFORUM and UK EPA Study

The UK sectors most highly involved in the EU-UK GVCs, such as motor vehicles and chemicals, would experience the largest effect” (Cappariello, 2019). We have seen from the data, that chemicals including organic chemicals in demanded in the UK, and is a significant export already to the UK from CF. Recent reports have shown that the border frictions caused by introducing borders where for over 50 years there was none has had a significant impact on food exports from the UK and the Imports from the EU. This is also an area of opportunity for CF, and we have seen in 2020, during the pandemic these imports from CF have increased. The increased administrative costs, including from paper work, SPS checks, and delays have significantly affected UK exporters. The UK’s Food and Drink Federation (FDF) has indicated that the hardest hit products has been meat and dairy, and it seems also drinks. The splintering into two different borders caused by Brexit also seems to have splintered the previously highly integrated UK-EU GVCs. 26 Estimates are that the impact of this on the UK is higher than on the EU, as EU producers perform processing in stages in the UK than UK producers do in the EU. This is borne out in recent news reports that indicate that UK producers are now taking their production to the EU. This could present a significant opportunity for CF in terms of investment ( mode 3) and integration into GVCs. The situation has been complicated because of the Trade and Corporation Agreements (TCAs) cumulation provisions which do not allow for diagonal communication. So that for those exporters who see the CF as a lucrative market and who because of the difficulty of proving origin under the TCA, may be better suited locating in CF and taking advantage of the CF-EU EPA duty free access into the EU. Reports are that UK producers have in fact been opting to pay MFN tariffs because of the difficulty of proving origin.

26 https://www.theguardian.com/business/2021/sep/02/brexit-uk-food-drink-exports-eu-disastrous-decline

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