What does Brexit mean?
From hearing it so much in the news, we have become accustomed to this word, which is nothing more than a contraction of two others: Britain + Exit. It refers to their leaving of the European Union.
In 1973 the United Kingdom joined the European Union and at many points there was controversy in the country over whether it should remain. On 23 June 2016 a referendum was held on the issue and the result gave the option to leave the EU as the winner, with 51.9% of the votes. After lengthy negotiations, the exit finally materialised on 31 January 2021.
Some critical points of Brexit
It is logical to think that after so many years, almost 50, that the United Kingdom has been integrated into the European Union, separation would not be an easy matter.
Political issues, such as the border between the two Irelands, whether Scotland (still part of the UK) would want to remain in the EU, or the issue of Gibraltar, were critical issues.
But perhaps other more everyday issues, such as the rights of citizens on both sides: freedom of movement, residence, work and access to healthcare, would be almost more important in reality.
And finally the economic and trade issue, customs, tariffs and import/export procedures, investments, the multi-million compensations for abandoning commitments made while in the EU. All this has been a real stumbling block and has meant several extensions to reach an agreement.
The current situation
We are currently in a transitional period that is expected to last until 31 December 2021. During these 11 months of transition (from February to the end of December 2021) many issues will still have to be resolved, especially in the economic field.
It would be normal that once all the negotiations have been completed, the United Kingdom will have a status somewhat similar to that of Switzerland or Norway, countries that are in Europe but do not belong to the European Union, but which enjoy many preferential agreements.
Trade relations with Spain
The United Kingdom is one of our most important trading partners, with a volume of around 60,000 million euros per year if all aspects (exports, imports, capital flows, etc.) are taken into account.
It is a highly populated country (67 million inhabitants) and its economy is the second largest in Europe and the fifth largest in the world. The service sector, especially finance, is highly developed and industry is also significant.
However, the UK’s agri-food sector is not self-sufficient and is highly dependent on imports, covering barely 45% of national needs. Spain, on the other hand, is a power in this area and appears as the 5th most important supplier, with 9% of the total imported by the UK.
The most important items of our agri-food exports are:
Fruits / Pulses / Vegetables / Wine and must / Olive oil.
The United Kingdom is a very interesting market for our agri-food sector, but since Brexit has become effective, the procedures for selling there have changed substantially. Now the requirements are greater and the documentation more complex.
If your company is in need of support in this area, IO Consultores can be of great help. Contact us for more information.