Scotch Whisky Association (SWA) chief executive David Frost has urged the UK government to put transitional arrangements in place that minimise trade disruption should the UK leave the EU — and to negotiate better global trading arrangements “than we currently have.”
Frost said the UK’s embassy network around the world will need to become “even more trade focused” to make this happen.
The SWA chief said the UK government must give a high priority to negotiating new trade deals in key markets.
Frost said: “The UK should be a voice for open markets globally.
“The more open the market, the more Scotch Whisky exports will grow to the benefit of the wider economy.”
Scotch Whisky exports were worth nearly £4 billion in customs value last year, making Scotch the biggest single net contributor to the UK’s trade balance in goods and the UK’s largest food and drink export.
The Scotch Whisky industry directly employs at least 10,000 and supports 40,000 jobs across the UK.
“Brexit poses challenges and uncertainty but also brings opportunities if the UK can secure favourable bilateral trade deals with key export markets,” said Frost.
“India, for example, is a growing market for Scotch but we are being held back by a 150% import tariff.
“EU talks with India have proved challenging for a decade now and we hope the UK will now take a fresh approach to securing an ambitious trade agreement.
“We want the UK to have an open and liberal trading policy, to put transitional arrangements in place that minimise trade disruption after Brexit, and to negotiate better global arrangements than we currently have.
“An even more trade focused British embassy network around the world will be needed to make this happen.”
The SWA said its latest analysis highlights markets with long-term potential for whisky exports and where an ambitious free trade agreement (FTA) with the UK could eventually deliver significant benefits through the elimination of tariffs and trade barriers.
It said priorities could include:
• Major markets with long-term potential: above all India, but also China, and Brazil (and the wider Mercosur region of Argentina, Paraguay, Uruguay and Venezuela)
• Fast-growing emerging markets with potential: for example Angola, Kenya, Nigeria, Burma, or Vietnam
• Established markets where further growth is possible with the boost of an FTA: Australia and Thailand
The SWA said its analysis of the potential impact of Brexit on Scotch Whisky distillers led it to highlight:
• Whilst Scotch Whisky will not face any new tariffs when shipped to the EU, there remains uncertainty around some future practicalities of exporting to the EU. The UK should negotiate to minimise cost and complexity for distillers
• Negotiators should ensure the UK can continue to benefit from existing EU trade agreements with major whisky markets, such as Colombia, Korea, or Mexico, with current provisions ‘grandfathered’ – transferred over after Brexit. Vietnam would also come into this category if the EU’s deal came into force before the UK leaves
• The industry sees little value in the UK being part of the EU Customs Union should it wish to strike new trade deals. The benefits would be outweighed by the limits on the UK pursuing an open trade policy and agreeing its own deals
• The UK should explore the potential benefits from joining existing trade deals, such as the Trans-Pacific Partnership
• UK Government departments and embassies need to boost even further their trade capacity and expertise to support strategically important exports, like Scotch Whisky, on market access and intellectual property
• The SWA welcomed the business certainty offered by the Great Repeal Bill – legislation transposing all EU rules into UK law, at least for a provisional period after Brexit
The SWA also called on the UK Government to make sure that no new UK domestic tax or regulatory burdens are placed on Scotch Whisky “at a time of continued uncertainty following the Brexit vote.”