Brexit and the Falkland Islands

A list of the potential implications on the Falkland Islands, of the UK exiting the EU, is to be drawn up between the Chief Executive and the Falklands private sector and presented to the Foreign and Commonwealth Office Minister Hugo Swire.

In a recent interview with Members of Legislative Assembly Roger Edwards, Ian Hansen and Michael Poole, accepted that it was a time of uncertainty for the Islands, “but we will find a way through it,” said MLA Poole.

He said there were, “obviously key things in terms of access and tariffs that will be focussed on,” adding that the Chief Executive Keith Padgett had already begun work on looking at the potential risks and implications across the Islands.

“He will be talking to industry groups about that and making sure they have got a complete list, and put that in the form of a letter to Minister Hugo Squire in the last times,” so that once the UK begins exit negotiations  with the EU the Falklands voice, “will be heard.”

Impact on the Falklands economy might be the imposition of tariffs on imports to the EU, less access to development funding and scientific research, and a loss of political clout as an overseas territory of a member state via the Overseas Countries and Territories Association (OCTA).

Many things are, however, unclear. MLA Edwards indicated that although the Islands are a member of OCTA until 2020, when he made enquiries about whether this would still stand after the UK left the EU, he received a vague response.

Some interviews made to local industry representatives the reaction varied from very uncertain through to optimistic.

Wool

Robert Hallol from Falkland Wool Growers, agents for a proportion of Islands sheep farmers acknowledged that the UK voted to leave the EU causing considerable upheaval at both economic and political levels.

He said markets generally had not anticipated Brexit and adjustments were, “ongoing”. Mr Hall said: “Both volatility and uncertainty have increased in many financial markets. From the perspective of Falklands exports however the relatively weaker pound makes Falklands products such as wool more attractive to foreign buyers.”

He said the global market for Falklands wool has generated some good export enquiries and sales.

In the medium term, he believed it would take at least two years for Britain to leave the EU, adding: “Companies in Europe have to import wool from countries throughout the world and that will continue to be the case. There are no tariffs on raw wool into the EU and that won’t change. As ever prices will be materially affected by currency exchange rates and the buoyancy of the wider economy. Falklands wool will continue to be in demand and find opportunities amongst our fine customer base in Britain, the EU and the US

Meat

Manager of the Falkland Islands Meat Company John Ferguson’s confidence was dependent on a number of factors. He said because  FIMCo was a, “3rd Country supplier,”  he expected the company’s  EU licence to remain in place, “however, as with other Falkland Islands’ export industries to the EU, we are ‘tariff and quota free’ by nature of being an OCT (Overseas Countries and Territories of an EU member) so this is likely to have a real impact unless the continuation of this status can be negotiated.”

Fish

Local fishing companies via the Falkland Islands Fishing Companies Association were also interviewed. In a statement they noted: “It is rather too early to speculate, and we do not yet know what changes might result. However, FIFCA, will endeavour to work closely with the Falkland Islands Government to address any such changes as they become apparent. We would hope that FIG would work with us to ensure that any negative impacts are mitigated against, and any positive impacts are capitalised on. The fishing industry is already an extremely volatile sector of the world economy, and our members’ businesses are generally structured to absorb major changes in their operating environment. We therefore look forward to continued growth in our fishing industry and the Falkland Islands economy for years to come.”

Marketing Manager for Consolidated Fisheries Ltd Janet Robertson told us: “I am appalled and taken completely aback by this result from a personal point of view, but from CFL’s perspective it won’t really have an impact on us in terms of our core business as the European market is extremely marginal for us. A weak pound also has its advantages to us so at this moment in time I can’t visualise any negative impact on our business.”

Tourism

Director, International Communications for the Falkland Islands Tourist Board, Tony Mason told  “…it’s business as usual.  “We accept that the British people have voted for change in the future and acknowledge that this is an industry that adapts more quickly than most.”

He explained that the Falkland Islands Tourist Board was an active member of the Association of National Tourist Offices and Representatives (ANTOR).  ANTOR had called on the industry to work together in order to make this new situation as trouble free as possible, said Mr Mason.

He said ANTOR and its members would, “lobby governments for negotiations that provide continued freedom of movement, ease of access, security and bi-lateral trading arrangements and give the consumer the confidence needed to continue to travel.”

He said he was confident  the Falklands would not see a reduction of tourists in the upcoming season.

Scientific research

The EU has been an excellent source of environmental research funding for Britain and its overseas territories explained Dr Paul Brickle on behalf of the South Atlantic Environmental Research Institution in Stanley

Within SAERI, there are three projects currently financed by the EU: EU BEST III, EU 2.0, and a Marie Curie Post Doc on peat as a record of climate change in the southern hemisphere. Importantly, SAERI is the South Atlantic Hub of the EU BEST 2.0 and III.

The BEST 2.0 programme is a funding facility that has been established to provide on-the-ground environmental projects over a five year period for EU OCTs while a longer term funding source is set up through the BEST Initiative.

Dr Brickle said: “Therefore, Britain leaving the EU is likely to mean that SAERI’s ability to tap into these various extremely valuable funding sources will be taken away, or at the very least, be significantly restricted. Will other funding opportunities be made available from the UK? And what will this mean for the shape of research to come? Only time will tell.”

Between 2007 and 2013, the UK paid €78bn into the EU, and received €48bn back, of which €8.8bn was for research and development.

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