Farm Ireland

Friday 27 April 2018

Food exports face tariffs of 35pc without deal on Brexit

Photographer: Chris Ratcliffe/Bloomberg
Photographer: Chris Ratcliffe/Bloomberg
Fine Gael MEP Brian Hayes Picture: Damien Eagers
John Downing

John Downing

Ireland's food exports to Britain - which support 150,000 jobs - face tariffs of up to 35pc if UK-EU Brexit talks collapse with no deal.

The full extent of tariffs under World Trade Organisation (WTO) rules have now emerged as London and Brussels engage in ill-tempered exchanges which have increased worries in Dublin about the upcoming negotiations ending without a deal. The acrimonious statements on both sides have led to British Prime Minister Theresa May repeatedly saying "no deal would be better than a bad deal".

But in the event of the Brexit talks failing to reach a specific EU-UK agreement, WTO rules would automatically apply immediately. These include tariffs of over 35pc for dairy products and 17pc for meat products, which would devastate Irish food exports to the UK.

Fine Gael MEP Brian Hayes said Ireland must lobby for "EU globalisation funds" to help support Irish exports in event of such a Brexit disaster. He said countries with similar interests, such as Belgium, the Netherlands, Luxembourg and Denmark, must be also recruited as allies in the forthcoming process which must be completed by March 31, 2019.

Mr Hayes said this worst-case scenario outcome from Brexit would mean disastrous WTO tariffs for Irish exporters. He pointed to reported comments from EU Commission President Jean-Claude Juncker that Britain was not realistic about the negotiations, which were rebuffed by Britain, which is currently in the teeth of a campaign for a general election on June 8.

"Given the week we've just had, where the back and forth between EU and UK sides has almost reached boiling point, the Irish Government needs to be prepared for the possibility of a worst-case scenario Brexit," Mr Hayes warned.

"Effectively, the worst-case scenario means that the EU and UK don't come to any agreement, there is a cliff-edge effect and WTO tariffs go up between the EU and the UK immediately. While I still consider this outcome unlikely, we saw that through the exchanges between Prime Minister May and EU negotiators that the negotiations can get ugly fast."

Mr Hayes said the Government needed to start working on contingency plans in the event that Irish exporters to the UK were suddenly hit with these WTO tariffs after Brexit. He also said the EU needed to set up a "Brexit globalisation fund" for all sectors which would be badly affected in the event of a hard Brexit and Ireland was not the only country in the firing line.

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"Equally, we need to strengthen our partnerships with these countries that have deep economic ties with the UK. These include the Netherlands, Belgium, Denmark and Luxembourg, which will also be badly affected by a hard Brexit," he said.

Mr Hayes said the implications were huge for various Irish business sectors, especially agri-food, dairy and clothing. Under the EU's external trading arrangements with WTO countries, dairy products are subject to an average bound tariff of 35.5pc, animal products are subject to an average tariff of 16.9pc, clothing products are subject to an average bound tariff of 11.5pc.

"At the moment, the Government is working on the basis of a soft Brexit. But we cannot be complacent about the dangers that lie ahead in these talks.

"Both sides already have different expectations about how the process will play out," he said.

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