UK government announces 'disastrous' no-deal tariffs on beef, dairy and lamb entering mainland UK
- Factories say tariffs are a massive threat to Irish meat exports
- Tariffs ranging from €1,500/t on manufacturing beef up to over €2,500/t on steak exports
- Zero tariffs on EU goods into the North under no-deal Brexit
While the UK government will not introduce any new checks or controls on goods moving into Northern Ireland if the UK leaves the European Union without a deal, large tariffs will hit Ireland's agri-food trade with the rest of the UK.
The tariffs will be payable on goods moving from the EU into the rest of the UK under a schedule of rates also released on Wednesday.
While 87pc of total imports to the UK by value would be eligible for tariff free access, crucially for Ireland tariffs would still apply to 13pc of goods imported into the UK which includes key products from our agri-food sector.
The UK Government announced a mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy to support UK farmers.
Many agricultural tariffs are compound duties and include a fixed cost by weight e.g. 12.8pc on lamb, plus €171.30 per 100 kilos.
The UK proposals suggest tariffs ranging from approx. €1,500 per tonne on manufacturing beef up to over €2,500 per tonne on steak exports.
The proposed tariff of €221 a tonne on cheddar- will result in a possible over €20 million per year in a tariff cost for Irish Cheddar.
But related factors such as customs costs, currency issues and an increase of international competition mean that the final bill for industry and farmers will be a multiple of this.
The roughly €22 million proposed tariff on Irish butter would be similarly multiplied with a €605 a tonne tariff slapped on initially but with a range of other costs inflating that figure.
Cormac Healy, Senior Director of Meat Industry Ireland (MII) said in a Hard Brexit scenario, Irish beef exports to the UK would now face tariffs that will undermine the viability of trade and is also being presented with a very restrictive import quota regime.
"This level of tariff would severely undermine trade. On top of this, the UK Government has proposed zero tariff import quotas, that on the one hand fall massively short of existing beef import volumes entering the UK market and on the other hand open these quotas to all global suppliers.
"Very quickly we can expect to see erosion of our position in the UK market in both volume and value terms, due to stiff competition from lower priced beef from other regions of the world” said Mr Healy.
Meanwhile, Dairy Industry Ireland said the proposed tariff level would put Irish butter and cheddar under severe pressure in the UK markets at current consumer price rates and would necessitate increases at consumer level in the UK- something that their government desperately wishes to avoid.
"Worryingly the British proposals again offer no solution for the Island of Ireland milk origin issue or the regulatory divergence threat.
"In 2018, 804 million litres of northern milk flowed south for use in a vast range of products in our integrated island of Ireland supply chain," it said.
IFA President Joe Healy said the tariff regime in the event of a no deal Brexit would be a disastrous scenario for Irish farmers.
After last night’s defeat in Westminster, the IFA President said the prospect of a no deal has moved closer. “Our most exposed sectors, particularly beef, simply will not survive the kind of tariffs being talked about. This would have a devastating effect in the rural economy,” he said.
“We export over 50pc of our beef to the UK. If this is subject to tariffs, it will be a ‘direct hit’ of almost €800m on the sector,” he said.
The President of Irish Creamery Milk Suppliers Association (ICMSA) said that the impact of the tariffs would be catastrophic and would severely impact on a centuries-old and multi-billion Euro food trade between Ireland and Great Britain.
Pat McCormack said that the immediate effect would be on Irish beef and dairy products where UK consumers’ prices would have to rise substantially and, even then, the level of tariff would make the trade completely unviable.
European Affairs Minister Helen McEntee said she agreed that the tariffs flagged on beef and dairy products would be “absolutely disastrous” for Ireland’s agriculture sector.
Fianna Fáil Spokesperson on Agriculture Charlie McConalogue, said the EU will obviously have to respond to the plans to allow goods to travel freely between the Republic and Northern Ireland in the short term and the Irish government will have to elaborate on their own plans to respond to this plan.
"The uncertainty is causing massive anxiety with businesses both North and South and will cost jobs soon if not sorted out," he said.
Although tariffs will be payable on goods passing from the EU to Great Britain via Northern Ireland, customs officers will rely on intelligence and compliance work rather than checks on cargoes to impose the levies.
Under a temporary and unilateral regime announced by Theresa May's government this morning, EU goods arriving from the Republic and remaining in Northern Ireland will not be subject to tariffs.
The government insists that this will not create a border down the Irish Sea, as there will be no checks on goods moving between Northern Ireland and Great Britain.
Instead, "normal compliance and intelligence methods" will be used to detect any traders attempting to abuse the system.
UK ministers accepted that the new regime will cause "concerns" to Northern Irish businesses and farmers about the impact on their competitiveness.
But they said these were the only steps that could be taken to deliver on the British government's commitment to avoiding a hard border in the case of no deal.
Under the new regime for Northern Ireland, goods arriving from the Republic will still be subject to the same VAT and excise duty as at present.
Small businesses trading across the border will be able to report VAT online without any new processes at the border.
To protect human, animal and plant health, animals and animal products from outside the EU would be required to enter Northern Ireland through a designated entry point, while regulated plant materials from outside the EU and high-risk plants from inside Europe will require certification and pre-notification.
There will be new UK import requirements such as document checks and registration for a small number of goods such as endangered species and hazardous chemicals which are subject to international agreements.
Northern Ireland Secretary Karen Bradley said: "The Government has been clear that a deal with the European Union is the best outcome for Northern Ireland.
"But we will do all we can to support people and businesses across Northern Ireland in the event that we leave without a deal.
"The measures announced today recognise the unique circumstances of Northern Ireland. These arrangements can only be temporary and short term."
In the case of no-deal, the UK government is committed to entering discussions urgently with Brussels and Dublin to agree long-term arrangements.
Additional reporting Press Association