COPENHAGEN (Reuters) - Danish food and agricultural exports to Britain could fall by almost 50 percent after Brexit even if Britain agrees a free trade deal with the European Union, a study commissioned by the Danish government found.
Britain is an important destination for Danish agricultural and food products like bacon and butter and Denmark exports more than 12 billion Danish crowns ($1.8 billion) of agri-food products to Britain each year, according to the report.
The study by University of Copenhagen researchers for the Ministry of Environment and Food, found the “best case scenario” with a free trade agreement between the block and UK, would see Danish food exports to Britain fall by as much as 48 percent.
In a situation where Britain fails to strike a deal on a new relationship with the EU and comes under World Trade Organisation rules, the decline in exports could be as much as 79 percent.
“Even if the UK manages to negotiate an FTA (free trade agreement) with EU27, such that goods trade will not be subjected to tariff barriers, this will presumably still lead to an increase in overall trade costs,” the report said.
However, the report stated that the total reduction in Danish exports will be quite small in both scenarios due to the possibility of redirecting exports within the European Union and partner countries to the various preferential trade agreements.
Reporting by Julie Astrid Thomsen; Editing by Catherine Evans