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Independent.ie

Monday 22 January 2018

Michael Creed: We are focused on the best deal for farmers and avoiding a 'cliff edge' scenario

 

Michael Creed
Michael Creed

Michael Creed

I have previously been critical of the lack of clarity from the UK about their key priorities in the context of Brexit, particularly with regard to the agri-food sector.

The papers published in the last week set out an initial UK negotiating position for the Brexit negotiations, rather than a likely final landing point for agreement.

While many very significant questions remain, if nothing else, these papers are an important first step in assisting the UK in its own reflections on how a relationship between it and the EU might work post Brexit.

From an agri-food perspective, the UK is a critically important trading partner for Irish business; 39pc, or €4.8bn of Irish agri-food exports were exported to the UK in 2016. Exports to third countries have increased significantly in recent years, but the UK remains the biggest single export market for agri-food.

As a result of a referendum of its people, the UK has decided to leave the European Union. We therefore find ourselves in a position not of our choosing, which requires a negotiation to define a new relationship between the EU and the UK. The papers published in the last week provide some clarity on what the UK's 'asks' are in the early stages of that negotiation.

The EU is a critical market

Importantly, it is clear from the papers that the voice of UK industry is beginning to be heard in UK government circles. UK business people recognise that the EU is a critically important market for them and that a liberal trading arrangement is in their best interests.

These papers are both a response to, and a vehicle for further consultation with that critically important constituency. That is to be welcomed.

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I hope that key players in the UK agri-food sector, with whom I have had detailed discussions, will take this opportunity to have their voices heard by the UK government.

I and my Department, along with the wider agri-food community, have invested a great deal of time and effort in the last number of months in engagement with UK and NI stakeholders across the agri-food sector to find areas of commonality and shared interest that might be valuable in the context of Brexit negotiations.

While new trade agreements with third countries are an inviting prospect for some in the agri-food sector in the UK, there is also a sense of realism around what the pursuit of such agreements might bring in terms of a potential dilution of standards and the competitive threats involved.

Key Question

There is also the key question for UK policy of how such deals could be reconciled with access to the EU single market.

The recognition by the UK in these papers that there will be a need for an interim or transitional arrangement is also welcome from an Irish perspective. Avoiding a 'cliff edge' scenario is vital, but of course the shape of any such arrangement would have to be considered very carefully.

One of the issues concerning the agri-food sector is the complication of what new arrangements may be put in place for Irish companies using the UK as a landbridge to access the EU market for Irish product.

In this regard, the UK's stated desire to remain part of the Common Transit Convention is to be welcomed, because it may facilitate the continued use of the UK as a land bridge for Irish product accessing the EU market. The UK also needs this facility because it uses the EU as a land bridge to third countries for many of its goods and Northern Ireland similarly exports goods through the Republic.

The indication by the UK that they may seek a system of 'regulatory equivalence' with the EU in the context of sanitary and phytosanitary standards is also welcome. However, these issues are complex and technical and a great deal of detailed discussion is required to progress any potential solutions.

There are significant political and economic issues at play here. The EU has agreed that the parameters of the post-Brexit relationship can only be discussed when sufficient progress has been made on the Article 50 discussions on the UK exit.

These discussions, which relate to the UK financial settlement, the free movement of EU citizens and border issues, are under way.

From an agri-food perspective, it is critically important that discussion on the exit issues moves forward as quickly as possible, so that we can begin the extremely difficult and technical discussions on how a transition period and a post-Brexit relationship might work.

Challenge

I do not underestimate the challenge, but the sooner we can get to that point, the better as food businesses grapple with the challenge of currency fluctuation while negotiations continue to evolve.

Ireland has made its objectives clear from the outset - the retention of a trading relationship as close as possible to the current one. We have also made it clear that the UK exit must not result in the restoration of an economic border on the island of Ireland. The special position of Ireland has been explicitly recognised in the EU negotiating guidelines.

We will be negotiating as part of an EU 27 which provides access to a single market of 450 million people, and free-trade agreements with almost 50 third countries.

We have a long road ahead but my focus is very firmly on working with the Taoiseach, Minister Coveney and other Government colleagues to achieve the best possible outcome for the food industry, from farm to fork.

Michael Creed is the Minister for Agriculture and a Fine Gael TD for Cork North West


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