Farmers in developing countries could face €1.1bn import tax hike after Brexit

Farmers in developing countries could face €1.1bn import tax hike after Brexit

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According to campaigners, farmers in some of the world’s poorest countries could be hit by at least €1.1 billion in extra taxes for importing goods to the UK when it exits the European Union.

Brexit could “make or break” the livelihoods of already-poor farmers depending on what action the British government takes on trade with 116 developing countries, the Fairtrade Foundation and Traidcraft said.

Without measures to replicate current EU rules – which exempt products such as bananas, sugar and coffee imported from developing countries from charges or taxes – the incomes of millions of farmers could be hit.

But there is also an opportunity to deliver fairer trade deals between the UK and those countries to help them work their way out of poverty, a report from the organisations at the start of Fairtrade Fortnight said.

Imports from developing countries to the UK are worth almost €40 billion annually, and almost half (47%) of them could face additional tariffs if Britain does not take action to replicate EU rules – costing approximately €1.1 billion.

Kenya’s cut flower industry could face new tariffs of between 8.5% and 12% for blooms sold to the UK, slapping an estimated €4.1 million in extra taxes on a sector, which supports the livelihoods of half a million people.

Malawi’s sugar industry could face additional import taxes of €4.3 million for raw cane sugar.

The threat comes on top of impacts that Brexit has already had on poor farming communities, with the devaluation of sterling putting pressure on prices they receive from UK buyers.

The fair trade organisations are calling on the Government to ensure poor people in developing countries do not find themselves paying new import duties.

Ministers should make an immediate offer of preferential access to British markets for those countries, they said.

The Government must also study the impact of future free trade deals with wealthier countries to make sure they do not undermine poorer nations, and it should be made easier for developing countries to sell higher value products to the UK.

Michael Gidney, chief executive of the Fairtrade Foundation, said: “Many farming communities are already living on the edge, struggling with the impact of exploitation brought on by low prices for their produce.

“Brexit could make or break the future for these farmers and could mean the difference between working their way out of, or way back in to, poverty.

“This Government has repeatedly said it wants new trade deals to be fair for all. We need action to match that ambition: if the UK is to become a great, global trading nation we must make sure we change trade for good.”

Robin Roth, chief executive of Traidcraft, said: “We’ve calculated that new taxes on imports from the world’s poorest countries could amount to around £1 billion if the Government fails to act.

“This could mean rising costs for UK consumers on things like fresh fruit, coffee and garments – or more likely, hit the income and working conditions of already poor and vulnerable producers and workers in developing countries.”

The Government could score a “quick win” by offering immediate one-way market access to imports from developing countries, ensuring uninterrupted supply for UK consumers and jobs and income for the world’s poorest producers, he said.

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