Farm Ireland
Independent.ie

Wednesday 20 March 2019

Reliant: Ireland is more exposed on exports than any other EU country - no deal could cost €1.7bn

Thinking cap: An anti-Brexit protester outside the Houses of Parliament in London. Photo: Getty Images
Thinking cap: An anti-Brexit protester outside the Houses of Parliament in London. Photo: Getty Images
Margaret Donnelly

Margaret Donnelly

Why would WTO tariffs being imposed by the UK be so significant to Ireland?

Ireland's agri-food industry is responsible for 128,000 farms and accounts for more than 12pc of Irish exports - worth €12bn a year.

As an export nation, we are hugely reliant on the UK market and more exposed than any other EU country to the impact of Brexit.

Ireland exports 90pc of the beef it produces, or 556,000t, and of that 51pc (253,000t) goes into the UK. It's worth €1.3bn to the Irish economy.

In the case of a no-deal Brexit, the UK will not have any trade deal with the EU and will fall back on WTO trading rules.

That would mean Ireland would be facing tariffs on its food going to the UK of €1.7bn a year.

Who will be worst affected by WTO tariffs?

There are around 100,000 farmers involved in beef production in Ireland, all reliant on the UK buying our beef.

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When it comes to agri-food the WTO tariffs that would have to be imposed on goods travelling from Ireland to the UK are very severe, especially for the beef sector.

WTO rules would mean that Irish beef being exported to the UK would be subject to tariffs in the region of 70pc. Add in trade costs, veterinary checks and additional paperwork, and industry figures suggest the real cost on beef travelling into the UK could be in the region of 84pc.

What about the talk of tariff-free quotas?

It is understood the UK is planning to bring in quotas which would allow a certain amount of food, such as beef, to be imported tariff-free.

However, this would still put Ireland in direct competition with countries such as Brazil which can produce cheap beef in huge quantities. Currently, the high tariffs faced by Brazil mean Irish producers can better compete.

What about other sectors?

The same will happen to other sectors, such as sheep. While France remains the top market, the UK takes 24pc of Irish sheep-meat exports, worth in the region of €51m, while 56pc of our pig-meat exports go the UK and are worth €400m. Some 50pc of Irish cheese and 24pc of butter goes to the UK, and, according to industry sources, dairy exports would reduce by 68pc. Tariffs on Irish cheddar would result in €150m being added on to exports to the UK.

What about Northern Ireland and the Border?

It's unclear still how the Border between Northern Ireland and the Republic would be managed when it comes to goods travelling across. The Border is 500km long and there are 275 official roads traversing it. Approximately 14,000 lorries, including 370 milk tankers, cross the Border every day.

Many Irish dairy processors have farmer suppliers on both sides and 745m litres of Northern Irish milk (36pc of their supply) is processed in the Republic. Approximately 500,000 live pigs travel from the Republic to the North for processing every year, while 400,000 Northern lambs are processed in the Republic every year.

An introduction of tariffs or custom controls would be cumbersome as well as costly, while the transport of agricultural goods for processing across the Border would be severely jeopardised.

Will there be food shortages?

Some companies and supermarkets have begun stockpiling food in recent months in the UK, including Ornua, which has 40,000-50,000t of cheddar in cold storage in the UK.

However, it's impossible to stockpile fresh produce.

Irish Independent