Phil Hogan has been speaking to a forum on Brexit organised by the IFA. Hogan described Brexit as an “era-defining issue”. He said, “Brexit is the most complex economic, political and in some ways cultural challenge to face Ireland, the UK, and the broader European Union in many generations.” He described himself as a “'voice from Brussels'” and acknowledged that “there are still infinitely more questions than there are answers.”
Commissioner Hogan welcomed the IFA policy paper on Brexit and noted the “All-Island Dialogues on Agriculture and Fisheries, for which Minister Creed's role should be acknowledged”.
Hogan said he spoke with UK farmers after the referendum announcement by David Cameron, outlining the benefits of EU membership: “Despite the result, I am glad I took the arguments to the sector.”
The commissioner said that “now that Article 50 has been triggered and the two-year time-frame, provided for in the Treaty is underway I have detected a greater sense of realism in the debate.”
He described Teresa May's decision to hold an election as “a further twist”, adding, “let's hope her decision will strengthen her capacity to face the extremist wing of her party with greater resolve, and continue the trend of realism and common sense”. But he also had a caveat: “I must stress that it is by no means guaranteed”.
“Currently, at least, some of the crazier ideas about crashing out of the EU without a deal, or falling back on WTO rules, are less in evidence.” Hogan blamed “looney voices on the right of the Tory party” for what he called “loud and abrasive headlines”. He said: “Up to now, economic rationale has had to take a back seat to political grandstanding. Hopefully we are now seeing more balance and realism.”
Hogan backs his colleague, EU chief negotiator Michel Barnier: “Personalities matter in this massively complex and sensitive political negotiation, and he is the right man for the job. Mr Barnier has shown a particularly keen willingness to understand the unique Irish exposure to Brexit, and he has reflected this in all his important public statements to date. In addition, as a rural man and a former Agriculture Minister, he also has an intuitive feel for farmers and the agri-food sector.”
Post Brexit Trade: Realism taking hold
Hogan pointed out that the IFA's policy document on Brexit identifies the optimum outcome as one in which "the UK would remain compliant with the Single Market and Customs Union". But Theresa May has said there are "elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries." From this Hogan concludes that “the UK government is ambitious and determined to pursue its own international trade agenda, through its membership of the WTO.”
Hogan sees problems with this ambition, calling it “somewhat fanciful when you look at the trade-offs the UK would have to submit to in order to do deals around the world.” These trade-offs will, according to Hogan, expose “inevitable faultlines over different visions of a UK-US trade agreement.” As an example, Hogan cites International Trade Secretary Liam Fox who is “pushing for agriculture to be included in such discussions claiming that Americans have been eating hormone beef and chlorine chicken perfectly safely for years, so what's all the fuss about? I predict an interesting debate on this. As you know, the EU has always been very firm on protecting food standards.”
“Would British farmers and consumers accept hormone beef and chlorine chicken on their supermarket shelves? I seriously doubt it. There may yet be a bloodbath over these issues. Meanwhile in the EU we can rest easy in the knowledge that our negotiating weight in trade deals means that our partners rise to our standards, rather than us lowering to theirs.”
Hogan said “the Prime Minister has been consistent in her support for a free trade agreement with the EU.” He added that it is his hope that “the British government will recognise that the best way to maintain the freest possible trade in goods such as agri-food products is to remain in the Customs Union, and that sense will prevail.”
Brexit is in Hogan's view “an error of judgement” but that EU officials have “come to accept the democratic will of the British people” and everyone is now resolved to make it a success.
But Hogan echoed the words of Michel Barnier in warning that "this free-trade agreement cannot be equivalent to what exists today. And we should all prepare ourselves for that situation."
Commissioner Hogan rubbished talk about a large bill for the UK to leave the EU. He blames this on “anti-EU right-wing media campaign in the UK.” He clarified this by saying that during “44 years of membership to date and during its remaining two years of membership, the UK has taken and will continue to take financial commitments. These settlements should be honoured in full and this will be an essential element of the negotiations on an orderly withdrawal.” Otherwise other EU member states “will have to foot the bill”.
Hogan said: “The value of UK trade with the EU is over €600bn per year, the settlement will only be a small fraction of that, paid presumably over several years. Again, as with everything, it can be the tipping point or it can be something dealt with rationally. Let's hope it’s the latter.”
Ireland and Brexit
Hogan avoided talking in detail about Ireland's situation, saying that the IFA was much better informed on this issue than him. He said: “I meet Minister Creed regularly and he is to be commended on the diplomatic offensive on which he has embarked to ensure that the interests of Irish farmers are understood across the EU. Brussels and national capitals now understand very well that Brexit is already having a negative impact on the value of Irish agri-food exports to the UK, principally as a result of the depreciation of sterling. Due to the fall in sterling, in a sense Brexit has already happened for Irish farmers looking to sell product in Britain.”
“While Ireland is uniquely exposed in terms of the proportion of product exported to the UK, there are a number of other Member States which also have significant exposure in terms of the volume and value of their trade to the UK.” He added: “For the EU, preserving the integrity of the Single Market is an absolute priority. That excludes participation in any agreement with the UK on a sector-by-sector approach.”
Hogan had some harsh words for those seeking a seperate agriculture deal: “There will be no agriculture deal and the continued pursuit of such an outcome is folly. That is exactly why a comprehensive free-trade agreement, with a tariff-free transition period, probably represents the best option to achieve your objective of continued access to the UK market.”
Hogan supports calls for a strong CAP budget post-2020. He said: “Because of the obvious uncertainty caused by Brexit and the terms of the financial settlement which have yet to be agreed, it is difficult to say what the financial implications of Brexit will be for the next period.” Hogan added a cautionary note: “It would, however, be naïve to believe that the CAP budget will be immune from the inevitable budgetary pressures that arise, not alone because of Brexit, but also because of the other political pressures on the budget arising from such issues as migration, security and defence.”
Hogan said he supports a strong CAP, which he described as probably “the most successful policy in the Union's 60 year existence, bringing the continent of Europe from post-war starvation to a point where we produce the highest-quality, safest food in the world”.
Hogan emphasised that all parties in the negotiations understand the unique Irish situation with regards to the border. He said: “The Irish government and the diplomatic service have done an excellent job in explaining the political consequences of Brexit, particularly in the context of the Good Friday Agreement and the negative impact of restoring a so-called hard border.” Hogan added that “Ireland is listed as one of the three main EU negotiating priorities by Mr Barnier, the others being the status of EU citizens and the divorce bill.”
Hogan then offered a pep talk on the strength and history of the Irish food industry. He said: “Just as the European Union is determined to act as one and protect its collective interests, the Irish agri-food sector should do the same. Just as with the European Union of 27, your strength is in your unity. This is a time for leadership, coherence, patience, realism and determination.”
He then said that unity of purpose was imperative to a successful outcome to Brexit negotiations: “Now that the worst of the Brexit triumphalism appears to have abated – at least for now - everyone with a stake in the future of the EU-UK relationship should exercise whatever influence they can to maintain this common sense trajectory.”
Hogan launched a final salvo at the disinformation which precluded the Brexit vote: “Most of the people who voted in June voted for the attractive slogan "take back control". No one really knew what it meant. Bizarrely these details are only now being seriously discussed. A huge education process is finally and only slowly underway. Everyone who cares about the UK, must, in their own small way contribute. The ideologues have had the airwaves to themselves for too long, shouting down anyone with the temerity to challenge the notion of a "hard Brexit". Let's be clear, no deal would be a disaster, not just for the UK, but everyone. Let's keep up the pressure for a balanced, informed process.”
Hogan closed his speech on an optimistic note: “While Brexit presents an enormous challenge, it is not an insurmountable one. The future will be different, but together it is a future we should face