The possible impact of Brexit on the Falklands is no nearer to gaining definition as UK MPs once again voted against a Brexit deal proposed by Theresa May, as well as voting against the possibility of leaving the European Union (EU) without any sort of deal.
Speaking to Penguin News on Wednesday, MLA Teslyn Barkman said that regardless of the outcome of Brexit, the Falklands will need to negotiate a future relationship with the EU independently of the UK. However, the UK’s future relationship with the EU is likely to be the framework upon which the Falklands negotiations can proceed, she said.
This separate negotiation is required because the Falklands’ current relationship with the EU is separate to the UK’s and is governed by the EU’s Overseas Association Decision (OAD). The OAD sets out the relationship between the EU and all EU overseas territories in a number of areas.
It is through the OAD that the Falklands currently enjoy tariff free trade with the EU. Paragraph 26 of the OAD calls for “procedures and arrangements that allow the [overseas territories] to export goods to the Union duty-free and quota-free.”
A quirk of this relationship with the EU is that the Falklands’ trading relationship with the UK also comes under the OAD. This means that the Falklands will also need to re-establish its trading relationship with the UK after Brexit.
However, that is expected to be more straightforward, says Ms Barkman. “We’ve had the assurance that it’s going to be completely seamless.” Ms Barkman highlighted the importance of that seamless transition to the meat sector, as some 70% of the Islands’ meat exports go to the UK.
Michael Ledwidth, from the Falkland Islands Meat Company (FIMCO), told Penguin News that the uncertainty over Brexit has meant that “it’s not at all easy to sell product at the moment.”
However, Mr. Ledwidth said long-term decisions will only be made once the disruptive process settles, “making a success of the Island’s meat industry needs quality, consistency, and timely supply. So, our farmers should not for one moment divert their efforts away from a high quality, bigger numbers ambition,” he said.
Ms. Barkman noted that fresh advice published by the UK Government suggested that a no deal scenario could result in the UK trading under World Trade Organization terms. That implies trade tariffs starting at 6% and ranging to 20%.
Ms. Barkman stressed that the UK’s future relationship with the EU may not necessarily be the same as the Falklands’, but admitted that such tariffs would have an impact on Loligo exports to the EU. “We have modeled what it would mean for our industry if there was a 6% tariff, if there was a 20%, and everything in between.”
“Either way we have to rebuild our relationship with the EU, hopefully we can develop that in a way that’s mutually beneficial,” she added.
MLAs and the Policy Unit will be holding a Brexit-themed public meeting on March 25. (Penguin News)