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News of an agreement between the EU and the UK on the terms of a future post-Brexit trade deal has been greeted with relief by those in the agri-food sector.
However, fears have been raised about the impact of non-tariff barriers, while the IFA has warned of the possibility of cheap food imports damaging the vital UK market for Irish food.
Bord Bia said it welcomed the deal, but noted caution about the impact of new competitive forces in the UK post-Brexit.
Tara McCarthy, Executive Director of Bord Bia, said she welcomed the clarity that the deal brings to Ireland’s food, beverage and horticulture sectors, but that considerable uncertainty still lies ahead for our largest indigenous sector.
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British Prime Minister Boris Johnson delivers a press conference in Downing Street on the outcome of the Brexit negotiations, in London, Britain, on December 24, 2020. Paul Grover / Pool via REUTERS
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“With 4.5 billion euros in food exports destined for the UK last year, this market is crucial for our beef, dairy, consumer ready foods and some horticultural producers.
“Four years after the Brexit process, starting on January 1, 2021, Ireland will face an entirely new set of competitive forces in post-Brexit Britain as customs compliance procedures are introduced and the market shifts. further expand global competition, “he said.
January will see the introduction of customs declarations, health certificates and other processes that will be new to many exporters and will add additional costs and complexities to decades-old supply chains.
“The continuing lack of details on some elements of Britain’s Border Operating Model will also bring uncertainty from January,” he noted.
Paul Kelly Food and Drink Ireland said the deal was welcome as disastrous tariffs have been avoided, but the deal reached is still a very tough Brexit.
However, he said food and beverage companies will face substantial non-tariff barriers to trade between Ireland and Britain with customs, SPS and other food safety requirements within days.
“This will lead to substantial ongoing costs that will have to be absorbed not only by the food supply chain but also by consumers. Reaching an agreement on measures to relax and facilitate customs and sanitary and phytosanitary requirements should now be a priority for both parties. This is the only way to reduce commercial friction and limit the costs that are transferred to the food chain and to the consumer ”.
Cheap food imports
IFA President Tim Cullinan praised the work of EU Chief Negotiator Michel Barnier for his patience and perseverance in seeking an outcome that avoids a crisis situation.
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European Union Chief Brexit Negotiator Michel Barnier speaks with European Commission President Ursula von der Leyen following her statement on the outcome of the Brexit negotiations, in Brussels, Belgium, on December 24, 2020 Francisco Seco / Pool via REUTERS
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“We have real concerns about how non-tariff barriers will affect our ability to keep trade flows moving. The scenes in Dover this week, with hundreds of stalled trucks and delayed loading, don’t bode well. Green Lanes have previously been implemented for the export of food. These should be prioritized after January 1, ”he said.
Tim Cullinan also said that the long-term implication for our food exports could be the flooding of the UK market by cheap imports. “The farmers here on the island of Ireland and in the UK are steadfast in their view of the standards. The danger is that the agreement is not strong enough to ensure that single market regulations are met, ”he said.
He said the UK’s agenda is to offer Australia, New Zealand, Canada, the United States and the Mercosur countries of South America access to its food market in exchange for trade agreements with those countries.
“If that happens, the value of the UK market for Irish food exports will decline and Irish farmers will suffer huge revenue losses, with knock-on effects on EU markets. The level playing field provisions built into this agreement by the EU will stop any race to the bottom, “he said.
ICMSA President Pat McCormack said he was aware that the devil could be in the details and ICMSA will analyze the relevant articles in the coming days to establish the exact impact on his sector.
“It must also be recognized that there will inevitably be significant administrative and logistical problems due to Brexit and it is now up to the Irish and EU regulatory agencies to play their part in ensuring that trade continues in the most similar way possible to the previous one. Brexit arrangements “, said.
Commenting on the deal, Ireland’s Dairy Director Conor Mulvihill said; “There is no doubt that the agreement announced today represents the worst option we have today.
“An economic analysis DII conducted in preparation for Brexit found that the situation we are in will result in an additional cost of 1.58 cents per liter to the 2 billion liters of milk we use in the cheddar cheese industry, which it is particularly exposed to the UK market.
“As of January 1, one of our largest markets becomes a third country outside of our customs union and single market, with all the administrative burdens and costs that it entails.
“While the Ireland / Northern Ireland Protocol helps sustain the island’s dairy processing economy, many problems remain.
“We urge the Irish government and the EU to work hard now to simplify procedures and work to reduce costs for Irish exporters, especially goods, such as dairy, with inputs from the Republic of Ireland and Northern Ireland.”
Dairy Industry Ireland is calling on the Irish government to now work on the things that are under its control to mitigate costs to industry and suppliers as a result of this now “hard” Brexit, such as;
- An immediate opening of an export credit insurance scheme to help companies aggressively seek new markets. Ireland is currently an outlier total in the EU without a state scheme despite Irish dairy exporting 95% of its product.
- Confirmation that the term “Irish” applies to Irish dairy and specialty nutrition products from across the island.
- Access for all Irish products on the island to existing EU free trade agreements.
- Access to intervention tools in the EU market for all products on the island of Ireland, such as assistance and intervention for private storage.
- Ongoing support and investment by the Irish state in alternatives to the British land bridge.
- Make sure the EU and Great Britain recognize that the product to and from Ireland via the British land bridge is ‘green laned’.
- Rapid roll-out of Irish and Brexit support funds to mitigate costs for Irish companies of maintaining supply chains in the UK and EU markets.
- Immediate implementation of a properly funded Capex scheme, led by EI, to support diversification and other value-added investments to mitigate Brexit.
- Irish officials to simplify export certificates to the UK for animal products, using the example of the EU / New Zealand veterinary agreement would be a start.
- Ireland should waive the costs of inspecting imports of British products for the Irish market.
- Continuous state investment in research and development.
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