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Hard Brexit could be “disastrous” for overseas producers

Published:  19 September, 2018

The Fairtrade Foundation has warned that a ‘no-deal’ Brexit could be disastrous for producers.

In a briefing paper the charity has warned of the impact of a ‘no-deal’ scenario, which it argues could lead to an increase in the cost of trade with developing nations.

In 2017, UK sales in Fairtrade wine grew
 by more than 30%, with wines coming from countries including the Lebanon.

The briefing paper said that the largest producer of Fairtrade wine is South Africa, with 24 producer organisations. The UK is also the top destination for South African wine, accounting for around a third of its wine exports to the EU.

Fairtrade said ‘no-deal’ could see companies stepping back from Fairtrade commitments. This would result in smaller volumes being bought on Fairtrade terms, less Fairtrade influence on issues such as living wages, and less investment in programmes.

Another issue it has raised concern about is that companies could switch their sourcing arrangements, ending long-term relationships with suppliers. It also warned that the burden of increased tariffs and other costs could be pushed down onto producers and workers.

There is also the possibility that currency devaluation could hit Fairtrade companies importing from developing countries, it said.

Fairtrade is calling on the UK Government and EU negotiators to step up efforts to avoid a ‘no-deal’.

It is calling for any agreement between the two sides to ensure that developing countries do not lose their market access, a future UK-EU agreement supports trade with developing countries, producers are protected from any negative impacts of Brexit and that any future trade policy has development objectives at its heart.

“March 2019 is now looming, but without clarity on a withdrawal agreement and transition period, many Fairtrade producers still don’t have guaranteed access to the UK market after Brexit Day,” said Helen Dennis, policy and advocacy manager at the Fairtrade Foundation.

“There could still be an opportunity to rethink UK trade policy with development at the heart, but without swift progress to secure a deal, good work that has been built up to support farmers in developing nations, including through Fairtrade, will be at risk.”