Those attempting to track the meandering Brexit trail in the three years since the referendum which decided that the United Kingdom (UK) would leave the European Union (EU) are well aware that the general election on 12 December most likely will determine the path forward. What that might mean for the cannabis market in the

The crowd of journalists, functionaries, trade association reps, and political junkies hovering in Brussels for fresh Brexit news grew over the course of the last week following what appeared to be a positive meeting between UK Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar. That meeting set the stage for what became intensified EU-UK

What happens next in British politics could mean a significant shift in the United Kingdom’s trade ties with the United States – but the hurdles are many and the process to reach results could be lengthy. Voting in the Conservative Party leadership contest closes today, with the winner and successor to UK Prime Minister Theresa May to take up position on 24 July. The two Tory leadership rivals, former foreign secretary Boris Johnson and the incumbent foreign secretary Jeremy Hunt, both have been calling to strengthen the U.S.-UK “special relationship” as they vied for the support of 160,000 Conservative Party members. Frontrunner Boris Johnson has pledged to seek an ambitious UK-U.S. trade deal as one of his first acts in office. This would be good news for the more than 40,000 U.S. companies exporting to and operating in the UK, many of which are negatively impacted by uncertainty over Brexit and the possibility of an economic rupture between the UK and the European Union. If – as expected – UK Prime Minister Theresa May hands over the reins to Boris Johnson in two days, a highly topical question will be how his premiership might fare in securing a U.S.-UK trade deal.

On the U.S. side, there is strong political support by the Trump Administration and some Members of Congress for a U.S.-UK trading alliance. Several steps already have been taken to strengthen the Anglo-American trading relationship and mitigate negative impacts of Brexit. In February this year, a U.S.-UK Mutual Recognition Agreement (MRA) was concluded, which rolls over relevant aspects of the existing U.S.-EU MRA, covering electromagnetic compatibility, telecommunication equipment and good manufacturing practice of pharmaceuticals. U.S.-UK agreements on derivatives and insurance also have been agreed. These would take effect immediately after the UK exits the EU in an EU-UK “no deal” Brexit scenario or at the end of a transition period in a “deal” scenario. UK-U.S. preliminary talks on a bilateral free trade agreement (FTA) spanning the last two years, however, have failed to show any meaningful progress and are considered to be deadlocked. Should the UK leave the EU without a deal at the end of October, World Trade Organization (WTO) terms would govern U.S.-UK trade until such time as a trade deal is agreed.

Much hinges on the UK’s post-Brexit trading relationship with the EU, which still remains a priority for the UK. As Boris Johnson pursues hardline rhetoric on Brexit, insisting both that the current EU-UK deal needs to be renegotiated – which EU leaders reject – and that the UK will leave the EU on the scheduled date of 31 October 2019, with or without a deal, it is difficult to predict how the UK-EU trading relationship will unfold in the coming months.
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Results of the European elections held in the UK on 23 May resulted in a significant defeat for the ruling Conservative party and a win for the Brexit Party, a single issue political group seeking for the UK to withdraw from the European Union. Several contenders, including former Foreign Secretary Boris Johnson, are taking a hard-line approach to Brexit and have pledged that under their leadership the UK will leave the EU with or without a deal on Brexit day. Other candidates, such as Environment Secretary Michael Gove and Home Secretary Sajid Javid, promise to unite Brexiteers and Remainers and “deliver Brexit”. Whomever succeeds May will inherit a daunting task. For business, the latest developments mean prolonged uncertainty and an increased fear of an abrupt departure from the EU with trade on World Trade Organization terms.

In an attempt to create a majority in the UK Parliament to ratify the withdrawal agreement she negotiated with the EU, Prime Minister May intended to made certain concessions. Among them was the idea of negotiating a new and separate customs union with the EU that would take effect when the UK is no longer part of the EU internal market. The Brexit Party rejects this proposal and it may not be tenable for the next Conservative Party leader. Nevertheless, pressure to avoid a hemorrhaging hard Brexit, may yet result in further consideration of a separate customs union with the EU. It is useful then to consider what a customs union without single market access and EU membership might look like and how it could affect business.


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On 10 April 2019, the European Union granted the United Kingdom a flexible extension, coined a “flextension”, until 31 October.  This additional period of time is intended, to allow the UK to ratify the Brexit Deal, an agreement devised between the EU and the UK for the orderly exit of the UK from the bloc. The Deal includes a transition period, a controversial solution to manage the border between Ireland and Northern Ireland, and provides for such things as citizens’ rights and the legal status of goods in transit at the moment of Brexit. The flextension will end as soon as the Deal is ratified, if it happens before the end of October.  Should the UK Parliament not find a majority to support the Deal, the UK could be forced to seek another extension or risk crashing out of the EU on Halloween.

The so-called “cliff edge” Brexit remains a real possibility considering that the Deal has been rejected by Members of the UK Parliament three times already, and successful cross-party negotiations is not by any means a foregone conclusion.  The UK certainly will continue its no deal preparations, including efforts to strike post-Brexit trade agreements with third countries; to date, the agreements it has secured cover only about 11 per cent of UK trade by value. The UK also could use this time to reconsider its Brexit strategy, which ranges from holding a second referendum to attempting to amend the Political Declaration attached to the Deal which delineates mutual commitments concerning the future UK-EU relationship to abandoning Brexit altogether.
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With or without a deal and unless there is a last minute extension, the United Kingdom will leave the European Union (EU) at 11 pm London time on 29 March 2019.  Since triggering the exit process, the UK has worked towards having a deal in place that would ensure a smooth departure, including a transition period that would largely preserve the status quo until the end of 2020 or even beyond.   At the same time, however, both the UK and the EU have engaged in contingency planning in the event a deal could not be agreed or failed to be ratified.  For the UK, this has included efforts to revise legislation to remove references to the EU and its agencies to ensure that UK law could function on Day One after leaving the EU.  This process has involved the review of hundreds of legislative acts to create new statutory instruments, many of which have yet to be passed into law.  The legislative backlog means that necessary legislation may not be in place before 29 March 2019.  To avoid a legal gap, the UK adopted the EU (Withdrawal) Act 2018 and provided therein a catch all provision to ensure that EU law that is not addressed elsewhere is retained.

Should the UK leave the EU without a deal, the UK will impose, update and lift sanctions as of 30 March pursuant to regulations issued under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). Sanctions regimes that are not covered would continue to apply, as retained EU law under the EU (Withdrawal) Act.   Sanctions laws apply to actions taken by UK persons, which includes companies and individuals, in the UK or anywhere else.
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On 14 November 2018, the UK Cabinet approved an agreement permitting the orderly exit of the UK from the European Union (EU), commonly known as Brexit.  Without such Withdrawal Agreement, the UK would crash out of the EU on 30 March 2019, effectively paralyzing trade between the UK and the Bloc.  As of this date,

Both the EU and the UK are eager to achieve a Brexit deal.  However, with time running short and red lines continuing to be drawn on both sides, a no-deal Brexit scenario remains a possibility.  For this reason, both the EU27 and the UK are expediting preparations for a hard Brexit.  Absent any temporary arrangements, if the UK leaves the EU without a deal on 29 March 2018, it will become a “third country” EU trading partner overnight.  Trade in agri-food between EU-UK would then be governed by World Trade Organization (WTO), EU and UK rules, and food products would no longer move freely throughout the EU.

Agri-food business operators should roll out their contingency measures.  Contingency planning for a “hard” Brexit includes making possible revisions to supply chains, buying-ahead, stockpiling, warehousing, relocating food production, transferring import function, re-labelling, obtaining relevant authorizations and certifications, and taking other practical measures to avoid business disruptions. Companies need to ensure proper controls are in place with regard to import and export regulations. 
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Brexiteers claim that leaving the EU single market and customs union creates a golden opportunity for the UK to regain power over its international trade.  The potential future post-Brexit free-trade agreement that has received the most attention is that between the U.S. and the UK.  A U.S.-UK Trade and Investment Working Group was set up in July 2017 to lay the groundwork for a potential future U.S.-UK free-trade agreement after Brexit.  Political interest on both sides of the Atlantic was also boosted last week in New York as U.S. President Donald Trump and UK Prime Minister Theresa May reiterated their “mutual desire to form a wide-ranging trade deal.”  The U.S. is, however, the more important market with the stronger bargaining power. The UK takes only 3 percent of U.S. exports, while the U.S. accounts for 15 percent of UK exports, as well as roughly 19 percent of the UK’s total imports of services and nearly 22 percent of the UK’s total exports of services.
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Prime Minister Theresa May’s recent visit to Kenya, South Africa and Nigeria was the latest in the United Kingdom’s global diplomacy effort to secure strategic economic­ partnerships in preparation for the UK leaving the European Union (EU).  In the first visit of a UK Prime Minister to Africa since 2013, a 29 person delegation of government and private sector representatives pursued May’s goal of becoming Africa’s biggest foreign investor within four years.  As a result of the trip, trade and investment deals worth some 300 million GBP were announced, involving everything from automobile manufacturing and digital money transfer services to insurance and agricultural technology. Importantly, the UK also reached a deal with the Southern African Customs Union and Mozambique to facilitate trade and announced major investments in education and voluntary family planning for the future of African youth.

Trade between the UK and Africa already is worth 31 billion GBP annually.  By 2050, a quarter of the world’s consumers will be African. According to the Prime Minister, “With a shared passion for entrepreneurship, technology and innovation, now is the time for UK companies to strengthen their partnerships with Africa to boost jobs and prosperity both at home and overseas.”

According to the African Agricultural Technology Foundation, 233 million Africans are either suffering from hunger or are malnourished; 32 million of these are under the age of five.  While Africa’s economy is driven by agriculture, farming continues to be largely at a subsistence level:  80 percent of the 51 million farmers are small holder farmers.  Further, 95 percent of all farming in Africa is entirely dependent on rainfall.  The challenge under these conditions is to increase food production by 50 to 70 percent by 2050 without destroying the environment.  What will be required is a combination of increasingly sophisticated farming techniques (e.g. precision farming), precision breeding; improved stewardship; access to advancements achieved by modern biotechnology to increase drought tolerance, increase yield, and combat plant pests and diseases; and enabling regulatory policies and frameworks.  Critical is the fact that more efficient agriculture directly translates into freeing women and children to pursue other economic activities and/or education.
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