The withdrawal of the United Kingdom from European Union could result in a substantial gap in financing the common agricultural policy (CAP), according to a note prepared by the European Parliament’s agricultural committee services.
The note, intended for the Parliament’s Brexit negotiator Guy Verhofstadt (ALDE, Belgium), says that Brexit will also lead to changes in market management rules, such as intervention, as a result of the loss of the UK’s production (the United Kingdom produces 33% of all sheep and goat meat in the EU, for example). Furthermore, there is likely to be a significant risk of trade disruption.
The current CAP mechanisms could continue to operate in their present form but the budget will depend on the willingness of the EU to: - compensate for the loss of the UK’s contribution to the EU budget; - maintain the CAP’s share of around 39% of the Community budget.
The UK’s departure could also force the EU to renegotiate trade agreements with third countries, in light of the loss of the UK market.
If a trade deal cannot be reached between the EU and the UK, the result could be customs duties of 14.4% on average on agricultural goods, the note says.
Any delays in Brexit could affect the post-2020 multiannual financial framework (MFF), acknowledged European Commissioner Günther Oettinger, who has been given the approval of Parliament to move from the digital economy portfolio to budget and human resources, following the departure of Kristalina Georgieva to join the World Bank (see EUROPE 11702). The Commission, working from the assumption that Brexit will take place in 2019, will have to bring forward proposals on the next MFF between now and the end of 2018. The new MFF could last five or seven years. (Original version in French by Lionel Changeur)