The European Fresh Produce Association (Freshfel) has said the recent decision by U.K. citizens to leave the European Union has created much uncertainty and could lead to a 'significant number of implications' for trade.

In a release, Freshfel voiced its 'concern' about the consequences of last week's U.K. referendum, which revealed a tight majority in favor of leaving the EU.

"This vote is opening a period of uncertainty for business, and an outcome which is likely to impact overtime existing fresh produce business," the organization said.

"Freshfel will closely follow the developments of this dossier and its implication for its members and voice in the coming months the specificity of the fresh produce business if the “British Leave” become reality and the new trade terms are negotiated for fresh produce."

The process to leave the EU will have to be undertaken in line with Article 50 of the Lisbon Treaty. Upon lodging of the notification of the U.K. to the EU, negotiations will have to be completed within a period of two years.

On Friday, British Prime Minister David Cameron said he would step down by October, allowing his successor to trigger Article 50 and lead the exit negotiations with the trade bloc.

European officials have urged the U.K. to activate the clause as soon as possible so as not to prolong a period of uncertainty.

Freshfel said that until that two-year period is over, it would remain “business as usual”, under the current terms and conditions provided by the single market and the free trade agreement (FTA) with third countries.

Other benefits of the Common Agriculture Policy, food safety legislation, and Research and Innovation projects will also remain fully applicable.

Political and legal complexity

The group said it was still a very early stage to speculate on the outcome of the Leave negotiation, highlighting that no precedent exists on this kind of dismantling negotiation.

"The process is also likely to imply high political and legal complexity," it said.

"As a result of this process, it could lead to significant number of implications for the fresh produce trade."

The U.K. leaving the EU could primarily affect existing trade between the other 27 EU countries and the U.K., given the importance of trade between those countries.

"This business is currently enjoying the benefit of the free circulation within the single market and trade is facilitated by the existence of the “acquis communautaire” securing harmonized rules within the single market," Freshfel said.

"The negotiation of the new Treaty that will govern the EU-27 /UK on the exit will have to address these matters and access conditions."

Impacts on third countries

Freshfel went on to say the U.K. was also a significant importer of fresh produce originating from third countries, and that these imports were currently taking the benefits of trade liberalization conditions set by existing numerous FTAs signed by the EU on behalf of its member states.

"Fresh produce trade was in this respect liberalized with many countries in the Mediterranean basins, with Southern Hemisphere countries, with former “ ACP” countries and now also with South East Asia countries," it said.

"With an exit, the FTA negotiated by the EU will most probably cease to apply for import into the UK. To maintain similar conditions, it will need to be governed by new bilateral trade deals, to be negotiated by the UK individually with the third countries.

"By experience, these negotiations processes are usually time consuming, lengthy and need to comply with the requirements of WTO [World Trade Organization]."

Today the U.K. market is being supplied with fresh produce originating from close to 120 countries - EU or third countries.

Freshfel said that last year the U.K. received more than 5.6 million metric tons (MT) of fresh fruit and vegetables from all origins around the world, with the important business valued at €6.8 billion (US$7.5 billion). Of the total volume, 2.9 million MT specifically originate from the EU.

The main suppliers to the market are Spain (1.4 million MT), the Netherlands (700,000MT), South Africa (350,000MT), Costa Rica (300,000MT) and Colombia (300,000MT).

Bananas represent 1.1 million MT of the total import volumes, with apples (450,000MT), soft citrus (300,000MT), oranges (280,000MT) and table grapes (280,000MT) also key categories.

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