British Parliament votes on brexit deal

On 15 January 2019, the British Parliament votes on the draft agreement that the United Kingdom concluded with the European Union in November on the brexit. This will regulate how the UK can leave the EU. However, many parliamentarians do not agree with the form or content of the agreement. If no agreement is given, there is an increased chance that the UK will leave the Union on 29 March without agreements on the traffic of goods, services and persons. ABN AMRO has listed the consequences of such a 'disorderly brexit'.

There are three possible scenarios that Dutch entrepreneurs will have to take into account.

1. Orderly brexit

If the UK Parliament approves the agreement, the UK will leave the EU on 29 March, but with a transitional period until 31 December 2020. During this period, EU rules and laws will continue to apply. Until this date there will still be free traffic for goods, services and people. In the short term, this will not have any adverse effects on Dutch GDP growth. In the long term, GDP is expected to fall by a maximum of 1 percentage point in the year 2030.

2. Disorderly brexit

The UK will leave the EU on 29 March, without agreements on the traffic of goods, services and persons. No transitional period will therefore apply. This will have major consequences for Dutch companies. Confidence in the economy will decline, the exchange rate of the British pound will fall further, which means that Dutch goods and services will become more expensive for the British and therefore more unattractive. In the year 2030, the growth of the Dutch economy as a result of a disorderly brexit is 2.5 to 1.25 percentage points lower than without brexit.

3. Bremain

Under this scenario, the UK Government would cancel the UK's exit, or if it fails to reach new arrangements with the EU on the traffic of goods, services and persons during the corresponding transitional period. In both cases, the UK continues to apply EU rules. There are also no effects on Dutch GDP growth.

Agricultural and Food

The UK is a major consumer of Dutch food products. No less than 10% of the total exports in the Food sector goes to the UK. This makes the UK the third largest food exporting country in the Netherlands. The meat sector depends on the UK for 15% of its exports, the fruit and vegetable sector for 12% and the dairy sector for 5%. The UK can supply 54% of its own food. The self-sufficiency rate for beef is 83%, poultry 86% and pork 61%.

Opportunities for a brexit

The UK also exports to the EU. In 2017, the UK exported around GBP 13 billion of food and drink to the EU. The UK's main exports are alcoholic beverages such as whiskey and beer, but also cheese, beef and pork. France, the Netherlands and Germany are the main EU countries to which the UK exports its food products.