The United Kingdom's intention to leave the single market as outlined in Prime Minister Theresa May’s Brexit speech on Tuesday has generated some concerns for the Falkland Islands Government, but a Member of the Legislative Assembly indicated this week they are still confident all will be well for the Islands under post- 2019 arrangements.
MLA Michael Poole told Penguin News they believed “mutual self interest would win out and market access would continue.”
Among other key points on Tuesday Mrs. May stated
• a commitment for the UK to leave the EU’s single market, and that MPs and peers will get a final vote on the deal;
• the UK would not be a full member of the customs union, but would hope to strike some sort of tariff-free deal;
• “no deal for Britain is better than a bad deal,” raising the possibility of the UK leaving the EU on default World Trade Organization rules.
Currently the Falklands, like other UK Overseas Territories, benefit from economic and environmental cooperation with the EU, as well as development assistance and policy dialogue.
Also, according to a report on the EU benefits to UK Overseas Territories produced in June 2016: “Free access to the EU market has been very beneficial to Falkland Islands and Tristan da Cunha, with respect to fisheries and agricultural exports….” And “…all Territories gain from free movement across the EU, which facilitates business links and educational opportunities.”
Funding from the EU has had a positive impact on UK Overseas Territories, amounting to at least €80 million between 2014-2020.
There is also a view that the EU reinforces the self-determination of the UK Overseas Territories particularly where one is the subject of a territorial dispute between the UK and other states.
Member of Legislate Assembly Michael Poole told Penguin News that MLAs had watched and read the Prime Minister’s speech regarding Brexit and it, “helpfully provided more detail in relation to the UK Government’s negotiating approach.”
He said as the Falklands Government and local industry had long recognized, “there is significant economic and trade risk to the Islands from Brexit.”
MLA Poole continued: “The clear intention to leave the common market, and at least elements of the Customs Union, is of course a concern for the Islands.
“However, FIG will continue to engage closely with local industry and with the UK Government on this issue and we remain confident that mutual self-interest will win out and continuing uninhibited market access for the Islands to the EU-27 can continue under the new arrangements post-2019.”
He and the Falkland Islands Government Head of Policy Diane Simsovic are due to meet with local industry groups on January 25, “to update on where we are”.
Following that they will meet with other UK Overseas Territories leaders in London on February 6. That will be followed by a meeting with Minister Robin Walker MP from the UK Department for Exiting the EU on February 7.
He said: “We hope and expect formal engagement with UKOTs through that ministry to continue most likely on a quarterly basis as the negotiation takes place over the coming two years (and potentially beyond).”
Chamber of Commerce
Speaking for the Chamber of Stacy Bragger said the Chamber continued to monitor the developments surrounding the implications of Brexit.
He said: “The largest area for concern remains the potential imposition of tariffs or quotas on fish or meat products.
“Any tariffs would seriously impact industry and the economy as a whole. The Chamber of Commerce, like the other business organizations in the Islands, will continue to engage with the Falkland Islands Government on the issue and emphasize that implications for the Falklands need to be a part of the discussions that will be taking place.”
The Islands total sales of locally produced fish, meat, and other agricultural products into the EU are valued at around £180 million per year, making the EU the largest single market for Falkland’ products globally.
It is estimated that over 70 per cent of the Falklands’ GDP is dependent upon access to the European market.
According to the June 2016 paper produced on the subject of Brexit and UK Overseas Territories, “the [Falklands] fishing industry benefits from various provisions under Title II of the 2013 Overseas Association Decision (Definition of the Concept of Originating Products).
The industry uses fleets from other countries - notably Spain, and without the safeguards in the OAD allowing fleets registered in, or flying the flag of, a Member State to operate in OCT industries the Falkland Islands would find it difficult to export its fish to the EU.”
The paper quotes the Falkland Islands Government suggestion that “any material change that results in less beneficial import/ export access could be potentially catastrophic for the Falkland Islands economy and people.” (PN)