Coping with Changing Trade Patterns

“The future of British trade after Brexit is shrouded in uncertainty. It is an unprecedented process, so it is hard to know where to look for clues as to how it may work out,” the Economist reports. “One possibility is a country whose trading patterns were perhaps more disrupted than any other’s by Britain’s accession to the European Economic Community (EEC) in 1973: New Zealand.

“Just as Brexit is likely to mean the end of British access to the single market, so ‘Brentry’ ended New Zealand’s preferential access to the ‘mother country’. In 1961, when Britain first announced its intention to join the EEC, it took about half of New Zealand’s exports – a similar proportion to the EU’s share of British exports today.

“New Zealand’s prime minister at the time, Keith Holyoake, warned his British counterpart, Harold Macmillan, that, without safeguards for its exports, New Zealand would be ‘ruined’. After years of negotiations, a transitional deal in 1971 agreed quotas for New Zealand butter, cheese and lamb over a five-year period, which helped to ease the shift away from Britain. Similarly – if in a much shorter time-span –Britain’s prime minister, Theresa May, now hopes to negotiate a transitional deal to smooth its departure from the EU.”

Original article by The Economist, February 11, 2017.

Photo by AFP.