|Editorial Commentary; Further look at the report by European Committee of the Regions (CoR) detailing the consequences of Brexit on trade & the economy in the EU27 regions & cities.|
While ‘Remoaner’ supporters keep highlighting just how much the UK still needs to do in order to be ready for Brexit – especially in a ‘No Deal’ scenario, only now is the EU apparently considering what the implications are for them at a local / regional level.
The following are just some of the ‘points of interest’ from the report;
For regions such as Brittany or Galicia, as well as for the whole of Ireland, a potential closure of access to the exclusive Economic Zone of Great Britain and Northern Ireland and also that of British dependencies, such as the Falkland Islands, would present considerable risks. As fisheries are the drivers of many local economies, the impact could be multiplied throughout the secondary (food industries) & tertiary (tourism, trade) sectors. (Page 14)
At present, Breton vessels conduct 50% of their activities in the UK’s Exclusive Economic Zone (EEZ). The Irish realize 30% of their catch in British waters. (Page 14)
One of the most exposed is the Belgian port of Zeebrugge, which does 45% of its trade with the UK. The automotive sector is of particular interest to Flanders, representing the third largest industry in the region and being at the heart of the logistics hub of the Port of Zeebrugge (the world’s largest hub for new cars, handling 2.7m units in 2016). The UK is the first Flemish market, accounting for 24.16% of the total Flemish export of vehicles for land transport…. (So it is not just the port of Dover facing problems!!!!). (Page 18)
The creation of a new external border on the Belgian coast would also entail the need to find logistical and political solutions to manage migration flows: Flemish ports would have to build border crossing points and cooperate with the UK authorities to prevent access to the port by illegal migrants trying to enter the UK22. (Page 18)
On a smaller scale, La Línea de la Concepción (a municipality of the area Campo de Gibraltar, situated in the south of the province of Cadiz and next to the Gibraltar) is an area which would most likely be negatively affected by a disorderly withdrawal of the UK. It is noted that in 2016 the unemployment rate in La Línea de la Concepcion, where labour supply largely exceeds local demand, was 35.2% compared with 1% in Gibraltar. For this reason, many Spanish citizens of La Línea work in Gibraltar. …….
However, this is not the only effect of Brexit on Spanish workers in the area. In fact, considering a EU27-UK trade relationship under the WTO scenario, many Spanish workers there could lose their jobs. Taking into account that almost one in five citizens of La Línea is employed in Gibraltar, the impact on families would be dramatic, causing a significant migration toward areas with more favourable employment conditions. …..
Considering that Spanish & non-Spanish commuters in Campo de Gibraltar spend about £118m p.a., the consequences in lost revenue due to Brexit would be especially detrimental for the municipality of La Línea.(Page 18)
A majority of local and regional authorities are worried about budgetary constraints resulting from the UK's withdrawal from the EU. Almost 60% believe financial losses would be possible because of a reduction in the EU's budget. However, there is also another important dimension which has to be taken into account when looking at the potential impact of cuts to EU budget/funds.
This pertains to the potential impact of the UK's withdrawal on the eligibility of regions under Cohesion Policy rules since the UK's departure will lower EU GDP per head and, thus, trigger changes in terms of eligibility/status for some EU27 regions by virtue of the statistical effect (changing their status from less developed regions into transition regions or more developed regions. (Page 26)
The extracts shown above may go some way to explain just why an ‘implementation / transition’ phase was quite speedily agreed, as it is not just the UK which needs to prepare for Brexit and also why the EU are trying so hard to include access to UK Fishing grounds.As for the RoI – NI border issue, a quick read of the ‘How to fix the Irish border problem - CapX’ article will quickly provide an ‘understanding’ of why it need not be a major issue if a FTA agreement is agreed. In fact you might even begin to wonder why it has been such a dominant ‘theme’ in the negotiations!