I remember when the British electorate passed Brexit in June 2016. “Wow!” I thought. “Does that sound like a bad idea!”
Seven years on, Brexit—Britain’s unilateral withdrawal from the European Union (EU)—remains (I gather) a divisive issue. But one sector that probably thinks of it as a bad idea is British fruit growers. Since trade barriers were put in place in 2021, British fruit exports to the EU have dropped from £248.5 million ($306.8 million) to £113.8 million ($140.5 million): more than 50 percent. UK fruit exports to EU have dropped by more than half since Brexit | Brexit | The Guardian
The obstacles to British fruit illuminates some valuable points about trade barriers. In this case, the chief barrier seems to lie not with tariffs or duties, but with bureaucracy.
“The chartered accountancy firm Hazlewoods, which analysed the figures, blamed a number of factors including the risk to farmers who are selling fruit, which may end up rotting if delayed by customs or phytosanitary officials in Calais and other EU ports,” reports The Guardian newspaper.
The Guardian quoted Rebecca Copping, a partner at Hazlewoods: “Long delays at UK ports are dissuading many fruit farmers from sending their produce abroad. Even double-digit inflation hasn’t been enough to bring the value of fruit exports into the black. This shows just how much damage has been inflicted on the sector.”
Logistics UK, which represents cargo and freight owners, has told British cabinet minister Lucy Neville-Rolfe, that it is particularly concerned about loads carrying produce from multiple suppliers, a practice known as groupage. Under current EU regulations, an entire load could be stopped if even one supplier has not provided the proper paperwork.
This situation highlights a type of trade barrier that is sometimes overlooked: bureaucracy, red tape, and paperwork. And one that is, in any given case, hard to foresee.
Tariffs are at least clearly stated in advance. U.S. apple growers are understandably incensed about Indian tariffs on their fruit, which now amount to a total of 70 percent of value.
The U.S. Apple Association sat down with the Biden administration in March to try to redress this problem.
Bad as this may be, it is at least foreseeable. An American apple grower can look at the 70 percent tariff as a quantifiable aspect of any sale to India and decide accordingly. But who can foresee a form that is not filled out quite right, with a missing signature, figure, or date? Customs officials may sometimes overlook minor omissions, but they don’t always, and they aren’t supposed to.
If your shipment consists of televisions or ladies’ underwear, it can be set aside for a couple of days until things are sorted out, and be no worse off. Fresh produce does not enjoy any such leeway.
In recent decades, the world economy has largely been guided by neoliberal policies. Neoliberalism in this sense has little to do with liberalism as understood in America today: it refers to a series of economic and political policies including free trade.
For complex reasons, this neoliberal world order is breaking down on many fronts. It will have many consequences. Increased red tape may be among them.