The British are Leaving: The Scary Way “Brexit” Could Impact US Agriculture

Now separated from the European Union, Great Britain is still very much a part of the geopolitical and trade environment of Europe. Picture by daniel_diaz_bardillo from pixabay.com

The wide, open plains and seemingly endless blue skies of the Texas panhandle feels worlds away from the misty, rolling countryside of Great Britain. On the surface,  the distance between Texas and Great Britain couldn’t feel any wider. However, the truth is, our worlds are far more interconnected than meets the eye. While the “Brexit” vote of 2016 may have no direct connection to Texas farmers and ranchers, the ripple effect of the British political drama could easily bring challenges to American agriculture in the years to come.

 

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Now separated from the European Union, Great Britain is still very much a part of the geopolitical and trade environment of Europe. Picture by Skitterphoto from pixabay.com

 What is “Brexit”?

“Brexit” is a nickname for the vote that shook the world, appropriately combining the words “Britain” and “exit.” The “Brexit” vote occurred on June 23, 2016, when the citizens of Great Britain voted whether or not to leave the European Union. The months leading up to the vote were steeped with political debates and media buzz, while the entire world held its breath waiting for the outcome. After the votes were tallied and the dust settled, hardly anyone could wait to start discussing the potential side effects of the landmark vote. Almost two years later, the conversation about the impact of “Brexit” hasn’t slowed down at all. However, there is hardly anyone talking about how American agriculturists could one day feel the ripple effects of “Brexit,” especially in regards to trade.

Trade History with Great Britain

Great Britain is one of the largest importers of food in the world, importing 45 percent of their food supply. Unfortunately, not many of those imports come from the United States. In 2015, Great Britain only imported an estimated 1.35 percent of the United State’s agricultural exports. So why does “Brexit” matter? “Brexit” is slowing down U.S. trade agreements with the European Union, costing American producers increased economic opportunities.

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According to the USDA, while most of our European exports are consumer-oriented food products, other substantial exports include soybeans, wheat and animal feed. Picture by kc0uvb from pixabay.com.

“Brexit” and Trade Negotiations

Before the overwhelming uncertainty brought about by “Brexit”, the United States and the EU were heavily discussing establishing a free trade market. The Transatlantic Trade and Investment Partnership, or TTIP, is aimed at reducing trade barriers between the two markets and stimulating over $450 billion in export opportunities for the United States. As for agriculture, TTIP could help increase the amount of agricultural products sold in Europe and reduce the agricultural export deficit within the region. Following “Brexit”, negotiations on TTIP have faced delays and the whole process has come to a near standstill. With the ever-shifting political climate in the European Union, support for TTIP has plummeted and with it so has hopes for the opportunity of increased global markets for producers.

What to Know Going Forward

As of right now, there is no end in sight for the TTIP standstill caused by “Brexit.” Both American and European politicians keep debating trade regulations and rising emphasis on nationalism. There are likely many ways to to improve agricultural trade with Europe, however, the rising emphasis on nationalism in both regions of the world means the idea of a solution is less likely to become reality in the near future. American agriculturists seem to be waiting at a locked door hoping someone will decide the opportunities on the other side are worth the hassle of trying to find the key. If you’re waiting at that locked door like I am and are looking for something to do, feel free to visit the following links or comment below with your thoughts on the issue.

Additional Links:

Agribank- Brexit will likely have ripple effects on U.S. agriculture

Purdue University- How ‘Brexit’ might affect U.S. agriculture, Indiana economy