Who gains in the Spanish economy with the agreement between London and Brussels?




Santa Claus left a gift this Christmas Eve at the European Chancelleries, which, not for expected, seemed practically impossible: a trade agreement between the European Union and the United Kingdom, to avoid a hard Brexit. A document that, according to various sources, has more than 2,000 pages and a not inconsiderable complexity. Now the 27 will have to study it, give it their blessing along with their respective national parliaments, the European Parliament and, on the British side, the always surprising Westminster. In short, British and European companies will be able to continue trading under the same conditions as before, without the dreaded import duties or quotas. However, both former partners have designed a mechanism for mutual surveillance – the Joint Association Council – and for ‘cross-sector’ retaliation – the imposition of tariffs, for example – in the event that, for example, the United Kingdom chooses to support certain sectors or lower their tax requirements to attract investment. But, in the case of the Spanish economy, how does this agreement affect?

What are the sectors that benefit the most from this agreement?

Due to the details that are already being known, among the great beneficiaries in the case of Spain are the most export-oriented activities, which will not have to face the dreaded tariffs or import quotas such as the automotive industry or the agri-food sector, especially fruits and vegetables. Specific, FEPEX (Spanish Federation of Associations of Producers Exporters of Fruits, Vegetables, Flowers and Live Plants) did not hesitate to show their “satisfaction” with the agreement last night and added that Spanish fruits and vegetables will be saved 198 million euros in customs duties. Otherwise, according to the customs duties established by the World Trade Organization (WTO), these would have been taxed by tariffs of 11.5% on average. All this in a sector that plans to export up to 1.95 billion to the United Kingdom this year. So, congratulations to the members of the Brussels negotiating team of this association of Spanish exporters.

In the case of the automotive sector, the European employers’ association ACEA (European Automobile Manufacturers Association) have recognized their “relief” by the agreement since in the case of a hard Brexit, exports to the United Kingdom would have been seen subject to a 10% tariff, according to the rules of the World Trade Organization (WTO). “There is no other industry that is more tightly integrated than the European motor industry, with complex supply chains that span the entire region,” ACEA CEO Eric-Mark Huitema said in a statement. Trade between the United Kingdom and the EU reaches in this chapter almost three million vehicles for a value of 54,000 million euros. To which could be added, a flow of almost 14,000 million euros per year in components and parts.

Why is the UK market so important for our fruit and vegetables?

It is the third destination for this type of exports after Germany and France, with sales forecast for this year of 1,950 million euros, according to FEPEX estimates. Specifically, it is a growth of 8% compared to 2019. If we take the reference from last year, sales to the United Kingdom of fruit and vegetables amounted to 1.5 million tons and 1,780 million euros. That is to say, 15% of everything that was sold abroad and 9% of all fruits. What is exported, specifically? Tangerines (154 million euros), Cabbages (150 million), fruits (125.6 million), raspberries (125 million), tomatoes (117 million), lettuce (116 million), grapes (102 million) and strawberries (96 million) ).

Are there clear losers with this deal?

Without a doubt, this is the feeling in the European fishing sector and, of course, in the Spanish Gran Sol fleet. As agreed with London, from next January 1, it opens a transition period of five and a half years in which the European fleet operating in the so-called Exclusive Economic Zone (EEZ) of the United Kingdom – about 3,000 ships from eight European countriesAmong them Spain, which catches a total of 640,000 tonnes per year, about 650 million euros – will be able to continue to do so, although at the end of these transition years fishing quotas will be cut by 25%. At the same time, once this time has elapsed, access to British waters must traded annually between Brussels and London, with the setting of the corresponding catch volumes. They can also choose to extend the agreed terms this Christmas Eve.

All of the above is very far from the objectives set by the fishing employers Europêche, whose president the Spanish Javier Garat, bet a few days ago in statements to ABC by « a long-term agreement, minimum of 25 years, to know in which frame we move ». In parallel, in a statement, the Spanish employer Cepesca has expressed its concern about the agreement and asked the Government to report on it as soon as possible. In addition to requesting the European Union “to adopt all necessary financial and political measures” to ensure its activity.

What weight does the United Kingdom have in European Union and Spanish exports?

Last year, exports the European Union exported to British soil for a value close to 300,000 million euros, while the English sold products worth 190,000 million euros to their partners so far.

How important is the British fishing ground for the Spanish fleet?

The Great Sun fleet, which operates in British waters is made up of 88 vessels and directly employs 2,150 crew members, according to estimates by the Spanish employers’ association Cepesca. To which should be added another 55 ships of Spanish capital and some 10,750 indirect jobs in auction houses, auxiliary industry, service or distribution companies in ports such as Sawgo, Celeiro, Burela, Ondárroa or Santander. Some 9,000 tonnes (about 27 million euros) are fished in the British fishery per year, mainly species such as hake, rooster and monkfish. Along with Spain, the fleets of Germany, Belgium, Denmark, France, Holland, Ireland and Sweden with rights over those waters that date back centuries.

And what about tourism?

The agreement establishes the possibility of travel between the UK and the European Union without a visa for periods of less than three months, so for an activity such as tourism – once Covid is overcome – the result of the negotiation represents good news. It must be remembered that the United Kingdom is one of the great “fishing grounds” of our tourism industry: Spain received more than 83 million tourists last year, according to the INE. Of all of them, more than 18 million were British with an average cost per person of 136 euros.

And the large companies such as Telefónica, Iberdrola, Banco Santander and Ferrovial, with interests in British soil?

On paper, the agreement guarantees access for both parties to the respective markets on equal terms. It is the closest to the current reality, so companies like Telefónica, Banco Santander, Iberdrola and Ferrovial with strong interests on British soil they have found an unexpected Christmas present. Specifically, in the press release issued yesterday by the Commission ensures that “the rights of companies, consumers and individuals They will be protected by binding mechanisms for the execution and resolution of disputes. In other words, companies on both sides of the English Channel will compete “on equal terms and any party will be prevented from using its regulatory autonomy” to give subsidies or aid.

And what about Gibraltar?

As she was in charge of remarking in several interviews to assess the agreement with media such as Canal 24 hours, the Minister of Foreign Affairs, Arancha González Laya, recalled that Gibraltar is out of the agreement and that will require subsequent negotiation with the British: “Spain will always seek an agreement,” said the minister.

Therefore, except for a last minute surprise, as of January 1 next the gate will be literally so again: with customs, more bureaucracy and greater complications for transit. . In mind, the traction effect that the Rock represents on the economy of the entire Campo de Gibraltar, since this new reality will not affect the 10,000 Spanish cross-border workers that their rights are already protected by the so-called “Withdrawal Agreement” in force since last February and whose validity will continue after what was agreed this Christmas Eve.

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