Friday 20 September 2019

Hard Brexit would cost Irish agriculture €5.5bn, stark EU report predicts

Micheál Martin said the conclusions were reasonable. Photo: Kyran O'Brien
Micheál Martin said the conclusions were reasonable. Photo: Kyran O'Brien

Niall O'Connor, Colm Kelpie and Cormac McQuinn

A worst-case scenario Brexit would cost the agri-food sector a staggering €5.5bn in lost exports, a European Union report has predicted.

The study prepared for the European Parliament's Committee on Agriculture and Rural Development lays bare the full potential impact of a hard Brexit and singles out Ireland as one of the most badly hit member states.

The document is one of the starkest reports to date about the impact of Brexit, with a senior source saying: "It shows how much we could lose."

The report stresses that the "impact of Brexit on Irish trade and the Irish economy will likely be very large" and puts the drop in agri-food exports at $6.5bn (€5.5bn) by 2030.

That could happen in a scenario where World Trade Organisation rules apply in the absence of Brexit deal on trade.

The report states that Brexit could dent economic growth to a greater extent in Ireland than the UK, potentially knocking almost 10pc off GDP here in a worst-case scenario.

It claims that Irish GDP could decline by 3.4pc and "might even reach 9.4pc if Brexit affects Ireland's access to the EU27 market".

"Expected impacts on Ireland are particularly concerning: Irish GDP loss exceeds the British one," the report noted.

"Indeed, Irish agri-food sectors, and more generally the economy as a whole, are highly dependent on trade with the UK, especially on intermediate consumptions' imports.

"As a consequence, Ireland deserves particular attention when considering redistributive policies to mitigate Brexit's negative impacts."

The report said that the greater drop in Irish GDP as a result of Brexit was explained by a drop in Irish agri-food exports to the UK and to the rest of the world, including EU27 countries as Irish production relies heavily on imported intermediates from the UK.

"The situation of Ireland deserves particular attention.

"Its trade with the UK plays an important role, especially imports: 27pc of Ireland's European imports are from the UK, and represent 46pc of total Irish agri-food imports (compared to 4pc on average for other European countries)," the report noted.

"Disruptions caused by Brexit may have particularly negative impacts on this country because of the large integration of UK products in Ireland's exports."

Separately, Taoiseach Leo Varadkar briefed the Dáil on last week's European Council meeting in Brussels where EU heads of government decided that Brexit negotiations would not progress to the next stage on future trade with the UK.

Mr Varadkar said that British Prime Minister Theresa May made positive points on the Brexit talks, including on citizens' rights, the need to protect the peace process in Northern Ireland, and her wish to avoid a physical border in Ireland.

But he said more detail was needed on these issues and the so-called divorce bill Britain would pay before the Brexit talks could move on to trade.

Fianna Fáil leader Micheál Martin said the conclusions of the council were "reasonable" and welcomed the EU meeting's conclusion that it is committed to "flexible and imaginative solutions for Ireland reflecting its unique situation".

Irish Independent

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