Will the draft Brexit deal be good for UK agriculture?
The UK's Agriculture and Horticulture Development Board (AHDB) has assessed the draft withdrawal agreement between the UK and the EU, which was agreed last week.
It says that most in the UK will view an EU/UK Free Trade Agreement (FTAs) as positive for agriculture. It will minimise disruption to trade with the EU, important to many of its sectors.
This goes further than other FTAs as there are no tariffs or quantitative restrictions across all goods.
However, it warns that checks at the border will mean trade friction and increased costs to trade.
"Studies place the cost of this at between 3-8pc. In agriculture these costs will benefit farmers in sectors where we are net importers (eg. Pork, Beef, Dairy and Horticulture) but adversely affect exporting sectors (notably sheep)."
It says that the price to pay for the lack of restrictions on trade is ‘cooperation’ on regulation.
"At present these are completely aligned but post-Brexit the UK could start to make different regulatory decisions which might benefit our businesses.
"The EU might feel that a breakdown in cooperation has occurred if a change is made which provides an unfair advantage by creating an uneven playing field."
It also says the same is true on customs, where cooperation is also envisaged.
"At present we are in the same customs union. In future, if the UK were to strike its own trade deal with a country the EU doesn’t have a trade deal – with the USA for example – the EU would want to check that any goods transported from the UK into the EU haven’t originated in the US."
Northern Ireland Border
One of the big issues surrounds any potential hard border between the Republic of Ireland and Northern Ireland.
"The withdrawal agreement notes a ‘protocol’ which could come into effect if a future relationship deal is not agreed within the transition period. If the protocol becomes active then a ‘single customs territory’ between the EU and UK will be established.
"The agreement states, ‘Accordingly, Northern Ireland is in the same customs territory as Great Britain. The single customs territory shall comprise: a) the customs territory of the Union, b) the customs territory of the UK”.
"This would see the UK and EU having essentially a free trade deal. However, there would need to be checks to ensure neither party is being used as an access point for the other. In addition, the UK would not be able to strike up trade deals that could undercut the EU’s position, basically resulting in the EU pretty much having control over the UK’s trade agreements."
However, it says this does not completely get away from Northern Ireland being treated differently to the rest of the UK. While products originating in Northern Ireland can be sold in Britain under a UK origin label those exported to the EU will have to be labelled as UK (Northern Ireland).
If this protocol comes into effect, both sides would need to agree on an alternative. If one side does not agree, then it continues.
Responsibility for the implementation and application of this will fall to a ‘Joint Committee’ comprising of representatives from the EU and UK, as well as being co-chaired by the regions.
Being co-chaired, any decisions would have to be agreed by both sides, including any extension of the transition period and ending any protocols.
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