Fairtrade warns of dangers of a no-deal Brexit

In a report released yesterday, the Fairtrade Foundation builds off its 2017 report about protecting market access to the UK for developing countries as Brexit unfolds. With 1.66 million Fairtrade producers across 73 countries and the UK a pivotal developed consumer market, the effects of Brexit stand to extend past country borders. According to Joab Gideon of Longonot Horticulture: “We rely on the UK market, we just have a few buyers in Germany and people don’t buy flowers in Kenya, so a large percentage of our exports depend on [the] UK. If Brexit meant we lost this then we’ll be suffering a lot.”

Among worries expressed by Fairtrade is the possibility for no-deal Brexit to increase the cost of trade with developing nations. This could lead to negative effects such as companies changing their sourcing arrangements and ending relationships with long-term suppliers, the devaluation of UK currency affecting Fairtrade countries, increased tariffs affecting producers and workers via lower wages and purchasing prices, and reduced Fairtrade influence as a result of companies going back on Fairtrade deals. With a deal on the table, the UK and EU would have until December 2020 to resolve negotiations about their relationship. Without one, the report says, 2019 will see serious consequences for both UK companies and those in developing countries.

The report suggests, as an immediate part of the solution, that the UK set in place schemes to mirror and replace the EU Everything But Arms initiative (which gives duty-free quota-free access to the Least Developed Countries) and the EU’s ‘Generalised System of Preferences.’ However, that is just a start. The report portrays the impact no-deal would have on a variety of products. All Fairtrade banana-exporting countries have a preferential trading agreement with the EU and, although the UK has stated there will be a rollover of existing agreements, this is not a certainty in no-deal Brexit. This has massive ramifications as Fairtrade bananas make up one third of the bananas consumed in the UK. This is true of Fairtrade coffee (which is in major UK retailers and coffee shops), Fairtrade sugar (which is a staple of UK supermarket shelves), Fairtrade cocoa (which comes from a sector with a history of child labour and employee injustices that Fairtrade has only begun to combat), Fairtrade flowers (which have grown significantly in the UK), and Fairtrade wine (which grew by over 30% in the Ukin 2017). The report presents an in depth analysis of these ramifications, looking at the effect different leave scenarios would cause.

As part of its concluding recommendations, the report makes four primary suggestions. The first is to “ensure developing countries do not lose their market access”, which includes encouraging the UK and EU to take the necessary steps to avoid a no-deal situation. The second is for the development of a UK-EU agreement that supports trade with developing countries. The third is a call for the protection of developing country producer from the negative impacts of Brexit, including the establishment of a fund to support suppliers, including Fairtrade suppliers, throughout any transition process. The fourth is for a future trade policy to have “development objectives at its heart”.

The report does mention that Brexit can be an area of future opportunity for Fairtrade farmers, but only with careful consideration for future policy and a well thought-out transition period plan. According to Helen Dennis, Policy and Advocacy Manager at the Fairtrade Foundation and author of the report: “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. Fairtrade producers around the world will be watching these negotiations with bated breath as what is decided will directly impact them. 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.”