Farm Ireland
Independent.ie

Saturday 23 September 2017

Brexit border, let alone duties 'extremely harmful' for Irish dairy industry - Report

A border security checkpoint at Newry, once a familiar sight
A border security checkpoint at Newry, once a familiar sight
Ciaran Moran

Ciaran Moran

A new report has highlighted the severe impact Brexit could have on the Irish dairy industry.

Eucolait, an organisation representing the dairy trade believes that the UK leaving the EU will cause great damage, economic and otherwise, to both the Union and the United Kingdom.

It highlights that the impacts of Brexit will not be felt to the same degree across Europe, with Ireland being the Member State most affected.

Looking at dairy trade, it says Ireland is both the main supplier and customer of the UK.

Also the Eucolait report notes that politically the divorce will be very complex not least due to the Good Friday agreement and the specific nature of the bo rder separating Northern Ireland from the Republic (future EU external border vs common travel area) .

"In this context, we would like to highlight the huge volumes of raw milk crossing the border from the UK to Ireland every day to be processed there: a bout 800 million litres in 2016 , corresponding to some 12 % of Ireland’s milk production pool.

"Moreover, 75 % of the processing facilities in Northern Ireland are fully or jointly owned by Irish cooperatives .

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"A reestablishment of a border, let alone duties, would be extremely harmful to both producers in Northern Ireland and dairies in the Republic of Ireland," it said.

Eucolait says in order to avoid any disruption of trade, the negotiations on the future trade arrangement should be an integral part of the article 50 process, rather than only being initiated once the exit has taken place.

"Today, EU MFN duties on the main dairy products are in the region of 100 - 200 €/100kg (approximately 40% to 80 % depending on product and prices ). If the UK continues to use the EU tariff classification and duty rates (at least in the first stage after Brexit), the same tariffs would apply to EU exports to the UK.

"It goes without saying that, given the size of the trade flows in both directions, the impact of such a scenario would be catastrophic," it says.

The second best option, according to the report would be an interim agreement maintaining the status quo until the talks on the future trade agreement are finalised and the new trading arrangements are implemented.

The establishment of such an interim regime should be decided as early as possible so as to limit the uncertainty faced by companies operating in both markets and to avoid any unnecessary disturbance of normal business activity, it says.

Online Editors