The upcoming negotiation surrounding the EU and UK’s future relationship will determine the future of the dairy sectors in these regions, with any shock to this sector set to affect the industrial and societal backbone of rural Europe. That’s the assertion from the European Dairy Association (EDA), which is growing increasingly concerned over the next EU-UK negotiating rounds in August and September and calls for an unprecedented level of pragmatism to be top of the agenda for both parties. It is also pushing for a deal that will eventually lead to zero tariffs on dairy trade.

EU dairy exports amount to around 99 percent (by volume) of the UK dairy imports while around 92 percent (by volume) of the UK exports are destined for the EU. These amounts have a high value for both parties. 

The UK has decided to leave the EU and the internal market and this will, of course, also have its economic impact. The UK’s transition period after Brexit officially ends on December 31. 
Failure to reach an agreement runs the risk of significantly disrupting dairy trade flows in both directions, says the EDA.However, the EDA stresses how important it is to avoid unnecessary trade barriers that will, not only potentially be impeded but could be extremely costly to the industry as well as the end-consumer. 

“Let’s make sure that consumers on both sides can still enjoy a great variety of dairy products of high standards at reasonable prices. Ideally, this would be by securing close cooperation with zero tariffs on dairy trade and as little border administration or costs as possible,” says the EDA. 

Failure to reach an agreement runs the risk of significantly disrupting dairy trade flows in both directions.

More than 1.2 million tons of EU dairy products might have to find new markets, or UK consumers will have to absorb the increased tariff cost. 

The export of UK dairy products to the EU would also become commercially difficult, given the EU’s World Trade Organization MFN (most-favored-nation) tariff schedule.

“We stand ready to discuss this pragmatism in order to secure a deal, as it is clear that the current impasse will be extremely damaging for consumers, farmers and companies in the EU and UK,” continues the EDA statement. 

“It speaks for itself that the level playing field provisions signed up to by the UK in the Withdrawal Agreement, as well as the Protocol on Ireland and Northern Ireland included in the Withdrawal Agreement are honored in negotiations.”

“Rest assured the dairy industry is not resting on its laurels. Our industries on both sides continue to prepare for the scenario of a hard Brexit and the economic and administrative consequences it will inevitably lead to during these times of COVID-19 and economic instability,” it continues.