Meat Industry Ireland (MII) submitted a document to the Oireachtas Agriculture Committee, outlining their biggest concerns should a no-deal Brexit occur.
The documents were first submitted on December 12th and MII describe a Hard Brexit outcome as “catastrophic for Irish agriculture and our food export business”. They warned that even a “more orderly” exit from the UK would still present many challenges to the Meat sector.
“It is essential, first, that a hard Brexit is avoided and that both sides succeed in concluding a Withdrawal Agreement that will trigger a realistic transition period.” The organisation said.
“This, in turn, will allow time to secure a satisfactory future trading relationship between the EU and the UK, retaining as much as possible of the current trading arrangements that exist,” they continued.
Irish Economy in danger -
The MII warn that Irish Meat Sector Exports to the UK Brexit represent an “unprecedented fracture of the European Union Single Market”. The Irish economy, amongst all other EU member states, the MII say is the most exposed of any.
“Within the Irish economy the agri-food sector is particularly reliant on the UK market and the meat industry’s exposure is of such scale that it will become the most disadvantaged sector from the departure of the UK from the EU.” They warned.
According to figures from Bord Bia, in 2017 Beef exports from Ireland to the UK totaled €1.3bn, with pig meat exports at €400m, sheepmeat at €51m and poultry at €240, €1.9bn in total. In fact, 51% of all Irish beef exported in 2017 went to the UK. The UK also has the largest share of Irish Pigmeat exports and 24% of all sheepmeat exported goes to the UK.
Hard Brexit Scenario -
MII say the key issue for the sector as it heads inexorably towards Brexit is, how will the Irish meat sector face up to the competitive challenge resulting from a fracture of the single market.
A ‘hard Brexit’, they say, with the potential imposition of very high tariffs on trade with the UK, together with additional transport costs, delays at borders, disruptions to logistics, as well as unforeseen threats arising from potential regulatory divergence, will present a massive challenge for the sector.
“The UK National Audit Office (NAO) released a report on 24th October 2018 on Government preparedness for controlling borders, including in a no-deal scenario. It concluded that trade between the UK and EU would be governed by World Trade Organisation (WTO) rules including the principle of ‘most favoured nation’.”, they said.
“This means that new customs controls, tariffs and non-tariff barriers could apply to around £423 billion of trade at the UK border. The NAO concluded that uncertainty and delays in negotiations has made it difficult to make planning assumptions and therefore, there is a high delivery risk for ‘day one of no-deal’ due to their scale, complexity and urgency.”
They also warned that the NAO report highlighted that infrastructure cannot be built before March 2019 and the additional resources required to operate the border may not be ready by then also. They also warn over food safety concerns, with the DEAFRA not intending to apply safety checks on imported food-related produce from the EU.
“Defra intends not to apply regulatory or safety checks on the majority of agricultural or food-related products arriving from the EU.” They said.
“Apart from their sort-term position on regulatory checks, the otherwise lack of preparedness for a ‘hard’ Brexit on the UK’s part will give cold comfort to exporters who will be expected to declare the duties they owe, which for Irish meat exporters would be prohibitive.”
The warned that a no-deal Brexit would be catastrophic with the impact on wider EU markets “monumental”, due to high levels of trade tariffs, veterinary checks and additional customs and transport costs.
“While the Irish sector would suffer greatest, a hard Brexit would send shock waves through the European meat industry, and would see businesses and livelihoods destroyed, job losses and a potential market collapse.” The document from MII states.
Potential Trade and Price Impacts -
The document submitted to the Oireachtas Committee on Agriculture outlines the potential trade and Price impacts of any no-deal situation, in accordance to analysis by UECBV.
- Beef: Exports from the EU to the UK -84%. Exports UK to EU -90%. Short term price effect -8.8%, long-term price effect -5.5%.
- Sheep; Trade from EU to UK -76%, trade from UK to EU -53%. Short-term price effects 12.2%, long-term 8.8%.
- Pork: Trade from EU to the UK -48%, UK to EU trade -56%. Short-term price effects -7.3%, long-term -4.6%.
The document concludes by highlighting that a soft Brexit scenario is “vital” in ensuring that Ireland is protected from the social and economic effects of Brexit.
“It is therefore crucial that the current negotiations deliver a withdrawal agreement that envisages a future trading arrangement that will maintain relationships between the EU and UK as close as possible to existing arrangements.” The MII urged.
“It is equally important that a realistic transition period is agreed that reflects the complexity of concluding such international agreements and does not lead to another cliff-edge. Untold damage to current trade relationships between the EU and UK has already been done, such as currency losses in trade, delayed investment and the incalculable loss of focus to core business while governments and business leaders have wrestled with Brexit preparedness issues.”
You can read the full submitted document here.