HE probably doesn’t catch The National very often, but former Chancellor George Osborne stepped right into the middle of our series on a hard brexit and how it will affect Scotland with a timely intervention yesterday.
Osborne said that leaving the EU without a trade deal would amount to the “biggest single act of protectionism” in UK history and mocked the idea of pro-Leave campaigners that new trade deals with other countries could compensate for not having good, tariff-free access to the EU.
The former Chancellor told business leaders: “Let’s make sure that we go on doing trade with our biggest export market. Otherwise withdrawing from the single market will be the biggest single act of protectionism in the history of the United Kingdom. And no amount of trade deals with New Zealand are going to replace that we do at the moment with our big European neighbours.”
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Osborne’s speech came on the day Brexit Minister David Davis told the Cabinet that not getting a trade deal was an “unlikely scenario.”
That is also the view of the trade organisation which represents Scotland and the UK’s biggest-earning export – Scotch whisky which last year had sales worth £4 billion globally.
The National has learned that the Scotch Whisky Association (SWA), whose distillers and bottlers are among Scotland’s biggest employers, has briefed its membership on what it is seeking in a future Brexit trade deal. It considers a hard Brexit without a deal unacceptable.
The briefing states: “With annual exports of around £4bn to nearly 200 countries, the continuing growth of Scotch whisky will be a litmus test of the success of the UK’s exit from the European Union. Whilst Brexit creates challenges, there are also potential opportunities if the industry’s priorities are delivered.”
The SWA is calling for “as open a trade policy as possible, first securing existing EU trade deal benefits and then developing an ambitious agenda of new and refreshed Free Trade Agreements.”
Referring to the definition of Scotch as an EU Geographical Indication (GI), it says: “The industry places great value on Scotch whisky’s international reputation and legal recognition as a product that must be produced in Scotland according to traditional practice.
“We need to ensure the transition from a protected EU GI to a non-EU GI protected in the EU is as straightforward as possible. We recommend mutual recognition of UK and EU GIs, as well as the creation of a UK GI register.
“Government should grandfather the protection of Scotch whisky secured through existing EU trade deals, as well as promote certainty around the definition and presentation of spirit drinks through transposition of the EU Spirit Drinks Regulation into UK law which will require amendment to the UK’s Scotch Whisky Regulations 2009."
The body stressed that other EU rules must also continue to apply, saying: “The industry continues to value a wide range of EU laws which have had a positive impact on the business environment across the single market, not least those governing labelling, spirit drink definitions, and bottle sizes.
“A pragmatic, non-disruptive transition will be fundamental, balancing influence, access, and opportunities. We support a ‘Great Repeal Bill’ that provides consistency and certainty, with all relevant EU laws transposed into UK law.
“Arrangements for future trade with the single market – and transit to other countries through the EU – must minimise cost and complexity.”
A spokesperson for the SWA said: “The success of the Scotch whisky industry should not be taken for granted during a time of such change as Brexit. As a major manufacturer and exporter, the continued growth of Scotch will be a litmus test of the success of the UK’s exit from the EU.
“Some aspects of doing business won’t change for Scotch post-Brexit. Under World Trade Organisation rules, Scotch will continue to benefit from a zero tariff on exports to the EU. In many other markets Scotch will also continue to see existing zero tariffs, for example in the US, Canada, and Mexico, as these are offered to all countries already. There are, however, many areas where Brexit could have a big impact on Scotch whisky trade and we’re working with government to address those potential challenges.
“That’s why we want the UK Government to pursue as open a trade policy as possible; secure continued robust protection of Scotch; transpose relevant EU single market legislation into UK law; find opportunities where a distinct UK approach could benefit domestic industry; and ensure a domestic tax and regulatory agenda that delivers a platform for international growth.
“We’re confident that Scotch whisky can continue to prosper and remain a vital part of the UK economy and exporting success – but that requires support.”
In a hard Brexit without a EU deal, all of these things might not happen, and that is something the Scotch whisky industry is not even contemplating.