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UK left EU on 31st January 2020

  • UK leaves Single Market and Customs Union on 31st Dec 2020 & will not seek extension
  • Two possible outcomes to EU-UK negotiations on a Free Trade Agreement from January 2021:
    • No deal – significant risk: trade on WTO terms, ie EU agri-food exports to GB would face prohibitive tariffs. To maintain food supplies, UK would probably introduce tariff-free quotas, but EU exports would then be in direct competition with third countries, prices would fall and the value of the UK market would be substantially reduced.
    • Limited FTA – at best: if both sides decide this is preferable to no deal.
      • FTA on goods only – possibly zero tariffs & zero quotas with no deal on services
      • May be unstable as UK tries to negotiate other trade deals and/or undercut EU.
      • EU reserves right to apply retaliatory tariffs and/or quotas in response to unfair competition.
    • Comprehensive FTA is impossible due to UK’s unwillingness to remain aligned to EU standards.

Preparedness

  • Major changes from 1st Jan 2021: longer delivery times, increased administration and costs
  • Government has launched Brexit Readiness Action Plan and ramped up publicity campaign for business and traders
    • Customs checks & Controls: new EU and GB controls on imports from GB and EU
    • Regulatory compliance checks: on imports by EU and UK authorities
    • Rules of origin: these define the maximum amount of a good that can come from outside a free trade area. Goods imported into the EU from the UK will have to demonstrate their originating status to qualify under a future FTA or be subject to tariffs
    • VAT: due on imports into the EU
  • UK Landbridge implications for Irish food exports
    • Dublin-Calais
      • Landbridge RoRo takes 20 hours
      • Direct ferry RoRo 40 hours
      • Direct ship LoLo 60 hours
    • Deal or no deal, serious disruption at cross-Channel ports is likely due to low levels of trader/haulier readiness and additional customs checks in France.
      • In worst-case scenario, UK government estimates 30-50% of trucks would not be ready, traffic could be reduced by 20-40%, and 7,000 trucks could be held up in Kent for up to two days, with the disruption lasting up to three months
    • EU draft agreement will give Irish food exports access to “green lanes” on arrival from the UK into continental EU ports to speed up their progress.
      • There is no UK agreement to allow Irish trucks avoid tailbacks on the UK side.

UK legislation to override NI Protocol (part of Withdrawal Agreement)

  • UK seriously damaged Irish and EU trust by introducing UK Internal Market Bill and expected Finance Bill to allow Ministers decide which goods shipped from GB to NI would be subject to tariffs due to risk of entering RoI/EU, issues around EU state aid rules and export declarations.
  • UK move also badly received in US, with Democratic leaders warning that they were prepared to block a US-UK trade deal
  • EU has launched legal action against the UK over its legislation, which would break international law, however negotiations are continuing as the EU does not want to be accused of walking out.
  • EU position is there will be no FTA without full respect for the NI Protocol & WA

NI Protocol

  • Part of WA
  • Purpose is to avoid a hard border in Ireland
  • Takes effect 1st Jan 2021, deal or no deal
  • Requires EU Customs and SM rules to apply to all goods entering NI from GB
    • EU tariffs to apply, unless goods are not at risk of entering the Republic.
    • UK is to expand infrastructure for SPS checks at NI ports on animals and agri-food and some new customs processes.
    • UK says NI businesses will have unfettered access to GB, – has not set out how NI and RoI goods are to be identified. 

EU-UK Negotiations on Future Relationship

  • No real progress on key issues for EU: Level Playing Field, Fisheries & Governance.
    • LPF – EU wants agreement on state aid and standards in agri-food, environment, climate change, taxation, etc. UK wants independence & rejects alignment with EU rules.
    • Fisheries – EU wants a balanced, long-term solution. UK wants annual negotiations
    • Governance – EU wants agreed governance and dispute resolution mechanisms comprehensive agreement covering all areas, rather than a series of stand-alone agreements
  • 3rd Oct, UK and EU agreed to intensified negotiations, likely to run to end-Oct or early Nov.

Other developments

  • Mairead McGuinness appointed EU Commissioner-designate for Financial Services, a significant area in future EU-UK relationship
  • EU Brexit Adjustment Reserve worth €5bn (separate to CAP)
    • To cover adverse consequences in member states & sectors worst hit by Britain leaving EU
    • Commission to bring forward proposals in November.
    • President has made it clear that Irish agriculture must benefit substantially from this fund.
  • UK trade negotiations with US, Australia & New Zealand
    • Japan deal agreed to replace EU-Japan FTAreportedly UK has agreed to tougher restrictions on state aid than what it is offering the EU
    • US trade deal unlikely this year
    • Former Australian PM Tony Abbott appointed as UK advisor
    • UK cabinet reportedly divided over access for hormone-fed beef, chlorinated chicken
    • Government rejected Tory amendments to Agriculture Bill – would have required food imports to be produced to same standards applying to British farmers
  • UK Global Tariff from Jan 2021 published. An EU-UK FTA would aim to eliminate tariffs.
    • Based on EU common external tariff, mostly provides similar levels of protection
    • Uses a 5-year average exchange rate of 83.6p (current rate 91p)
  • GB Border Controls for EU Goods: to be introduced in 3 stages. (Does not apply to NI-GB trade)
    • Jan 2021 – Standard goods: traders will have up to 6 months to complete customs declarations & pay tariffs. Live animals & high risk plants will require pre-notification, health documentation & be subject to physical checks at destination or other premises
    • April 2021 – All products of animal origin (POAO), regulated plants & plant products will require pre-notification & relevant health documentation.
    • July 2021 – For all goods, declarations & payment of tariffs required at point of importation. SPS commodities: increased physical checks & sampling now at GB border control posts

EU negotiating mandate (25th February 2020)

  • Offers FTA with no tariffs and no quotas
    • Conditional on level playing field and on terms of a fisheries agreement
    • Agreement “should uphold common high standards, and corresponding high standards over time with Union standards as a reference point” in the areas of state aid, competition, employment, environment, climate change, relevant tax matters.
    • Specific reference to not reducing standards re health and product sanitary quality in the agricultural and food sector[1].
  • EU reserves right to apply autonomous measures to react quickly to unfair competition.

IFA Position

  • IFA wants closest possible future trading relationship that maintains value of the UK market for Irish farmers, which in turn will ensure the stability of the EU food market.
  • Three objectives:
  1. Tariff-free and quota-free access to the UK market
  2. Level playing field whereby the UK maintains corresponding standards on food safety, animal health, environment, etc and
  3. No return by the UK to a cheap food policy, so that their external tariffs and import quotas for sensitive products such as beef, butter and lamb do not undercut the EU.
  • For GB trade to NI, IFA requires close SPS and customs checks and controls on all live animals and agri-food products
    • NI must not become a back-door into the EU for UK’s sub-standard food imports.

See detailed draft policy paper IFA Brexit Emergency Plan on Irish and EU support measures.

Bryan Barry
Association Secretary

UK leaves EU on 31st January 2020

  • UK will exit Single Market and Customs Union on 31st Dec 2020 & will not seek extension
  • There are 3 broad scenarios re an EU-UK Free Trade Agreement from January 2021:
    1. Comprehensive FTA – unlikely: a broad, deep partnership on trade in goods and services, and economic co-operation with no tariffs or quotas provided a level playing field is ensured
    2. No deal – risk remains: trade on WTO terms, ie EU agri-food exports to GB would face prohibitive tariffs. To maintain food supplies, UK would probably introduce tariff-free quotas, but EU exports would then be in direct competition with third countries, prices would fall and the value of the UK market would be substantially reduced.
    3. Limited FTA – at best: if both sides decide this is preferable to no deal.
      • FTA on goods only – possibly zero tariffs & zero quotas. No deal on services
      • EU reserves right to apply tariffs and/or quotas in response to unfair competition.
  • Changes happening from 1st Jan 2021: longer delivery times, increased administration and costs
    • Customs checks & Controls: new EU and GB controls on imports from GB and EU
    • Regulatory compliance checks: on imports by EU and UK authorities
    • Rules of origin: these define the maximum amount of a good that can come from outside a free trade area. Goods imported into the EU from the UK will have to demonstrate their originating status to qualify under a future FTA or be subject to tariffs
    • VAT: due on imports into the EU
  • Implications of UK Landbridge for Irish food exports
    • Dublin-Calais via Landbridge RoRo takes 20 hours, vs 40 hours by direct ferry RoRo and 60 hours by direct ferry LoLo
    • Deal or no deal, UK accepts disruption at cross-Channel ports is “clearly a possibility” due to additional customs checks in France and low levels of trader/haulier readiness.
    • Contingency plans include backing up 4,000 trucks on/near the M20 outside Dover
    • Disruption unlikely to extend much beyond mid 2021
    • An EU draft agreement will give Irish food exports access to “green lanes” on arrival from the UK into continental EU ports to speed up their progress.
    • However, there is no agreement whereby the UK would facilitate Irish trucks to avoid tailbacks on the UK side.

EU-UK Negotiations on Future Relationship

  • After two months of intensified talks, EU & German Presidency feel the summer has been wasted
    • Barnier was disappointed & said a deal “remains unlikely”.
    • UK says it will be difficult to finalise a FTA before end 2020.
  • No progress on key EU demands: level playing field & Fisheries.
    • LPF – EU wants agreement on state aid and standards in agri-food, environment, climate change, taxation, etc. UK wants independence & rejects alignment with EU rules
    • Barnier said LPF was “a non-negotiable pre-condition” for access to the EU market and hinted at a deal on common standards and governance via a “toolbox”, but UK has not reciprocated nor tabled its own proposals
    • Fisheries – EU wants a balanced, long-term solution. UK wants annual negotiations
  • Some progress on governance – re UK’s concerns on role of ECJ and EU’s desire for a comprehensive agreement covering all areas, rather than a series of stand-alone agreements
  • Next round w/c 7th Sept. EU says a deal is required by end October, possibly by 15/16 Oct European Council, to allow time for ratification.

Other developments

  • July European Council agreed on a Brexit Adjustment Reserve worth €5bn (separate to CAP)
    • To cover adverse consequences in member states & sectors worst hit by Britain leaving EU
    • Commission will bring forward proposals in November as to how this will apply.
    • President has made it clear that, as the member state and sector most affected, Irish agriculture must benefit significantly from this fund.
  • Resignation of Trade Commissioner Phil Hogan, 26th New Commissioner & portfolio?
  • UK trade negotiations with US, Japan, Australia & New Zealand and eg
    • Reports that former Australian PM Tony Abbott may be appointed as UK advisor
    • Japan deal likely this year to replace EU-Japan FTA
    • US trade deal unlikely this year
    • UK cabinet reportedly divided over possible offer on access for hormone-fed beef, chlorinated chicken, etc with higher tariffs to protect British farmers. Some Ministers want higher tariffs phased out – opposed by Gove & Eustace
  • UK government rejected Tory amendments to its Agriculture bill – whereby food imports would have to be produced to same standards applying to British farmers
  • UK Global Tariff from Jan 2021 published. An EU-UK FTA would aim to eliminate tariffs.
    • Based on EU common external tariff, mostly provides similar levels of protection
    • Uses a 5-year average exchange rate of 83.6p (current rate 89p)
  • GB Border Controls for EU Goods: to be introduced in 3 stages. (Does not apply to NI-GB trade)
    • Jan 2021 – Standard goods: traders will have up to 6 months to complete customs declarations & pay tariffs. Live animals & high risk plants will require pre-notification, health documentation & be subject to physical checks at destination or other premises
    • April 2021 – All products of animal origin (POAO), regulated plants & plant products will require pre-notification & relevant health documentation.
    • July 2021 – For all goods, declarations & payment of tariffs required at point of importation. SPS commodities: increased physical checks & sampling now at GB border control posts

Northern Ireland Protocol (replaces backstop – purpose is to avoid a hard border in Ireland)

  • Part of Withdrawal Agreement – takes effect 1st Jan 2021, irrespective of EU-UK FTA or no deal
  • Requires EU Customs and SM rules to apply to all goods entering NI from GB
    • EU tariffs to apply, unless goods are not at risk of entering the Republic.
    • UK is to expand infrastructure for SPS checks at NI ports on animals and agri-food and some new customs processes.
    • Barnier concerned that the necessary measures will not be in place by 1st Jan
    • UK says NI businesses will have unfettered access to GB, but has not set out how NI and RoI goods are to be identified?

EU negotiating mandate (25th February 2020)

  • Offers FTA with no tariffs and no quotas
    • Conditional on level playing field and on terms of a fisheries agreement
    • Agreement “should uphold common high standards, and corresponding high standards over time with Union standards as a reference point” in the areas of state aid, competition, employment, environment, climate change, relevant tax matters.
    • Specific reference to not reducing standards re health and product sanitary quality in the agricultural and food sector[1].
  • EU reserves right to apply autonomous measures to react quickly to unfair competition.

IFA Position

  • 23rd July: President attended Brexit Stakeholders’ Forum with Foreign Affairs Minister Simon Coveney and Minister of State Thomas Byrne
    • Coveney said at best a basic FTA will be agreed & referred to €5bn Brexit Reserve Fund
    • President said if no deal, then Irish agriculture would need at least €2bn of EU Brexit Fund
  • IFA wants closest possible future trading relationship that maintains value of the UK market for Irish farmers, which in turn will ensure the stability of the EU food market.
  • Three objectives:
  1. Tariff-free and quota-free access to the UK market
  2. Level playing field whereby the UK maintains corresponding standards on food safety, animal health, environment, etc and
  3. No return by the UK to a cheap food policy, so that their external tariffs and import quotas for sensitive products such as beef, butter and lamb do not undercut the EU.
  • For GB trade to NI, IFA requires close SPS and customs checks and controls on all live animals and agri-food products
    • NI must not become a back-door into the EU for UK’s sub-standard food imports

Brexit Support Measures required by Irish Farmers

  • IFA secured a Govt €50m support scheme for beef finishers. This was a direct response to our case for compensation for losses suffered by beef finishers due to Brexit/Covid-19  – see Livestock Report.
  • July European Council agreed on a Brexit Adjustment Reserve worth €5bn – IFA had campaigned for a contingency fund to back Government and EU support measures
  • The EU Brexit Adjustment Reserve must provide
    • Compensation for any further losses during Transition arising from Brexit uncertainty, sterling volatility and COVID-19 impact
    • Support for all sectors adversely affected by the Brexit outcome, ie to include direct payments to farmers to fully compensate for the reduced value of the UK market in addition to market support measures, and longer-term structural and adjustment funding.

[1] Annex to Council Decision 5870/20 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for a new partnership agreement; paragraph 103.

Bryan Barry
Association Secretary

Background: UK exited EU on 31st January 2020 – in Transition Period until 31st December 2020 

  • UK will not seek TP extension – will exit Single Market and Customs Union on 31st Dec 2020 
  • Irish farmers again face threat of ‘no-deal’, ino Free Trade Agreement by end 2020 
    ie  tariffs on exports to GB and increased competition from third countries. 

 EU-UK Negotiations on Future Relationship 

  • Five weekly rounds of negotiations started 29th June after BJ & EU agreed to intensify talks 
  • Negotiations are dead-locked after four previous rounds held since March 
  • BarnierEU is asking for nothing more than is in the Political Declaration negotiated with Boris Johnson … UK continues to backtrack on its commitments. 
  • Three main areas of difference 
  • EU wants a comprehensive partnership agreement covering all areas – UK wants a series of stand-alone agreements on trade, fisheries, services and other areas 
  • EU wants a level playing field on standards in agri-food, state aid, environment, climate change, taxation, etc.  UK wants independence & rejects alignment with EU rules  
  • Fisheries – UK wants a separate deal & annual negotiations  
  • Germanin EU Presidency from 1st July – Merkel legacy 
  • EU says agreement required by end October to allow time for ratification. UK says by autumn. 

Other developments 

  • Tory government rejected amendments to its Agriculture bill – whereby food imports would have to be produced to same standards applying to British farmers (Conservative MP Neil Parish) 
  • UK & US trade talks 
  • Reports that UK will offer access for hormone-fed beef, chlorinated chicken, etc but with higher tariffto protect British farmers. Cabinet divided. Some Ministers want higher tariffs phased out – opposed by Gove & Eustace 
  • If UK allows lower standard US imports, then EU will require greater checks on UK imports  
  • UK is also in trade negotiations with JapanAustralia & New Zealand 
  • UK Global Tariff from Jan 2021 published. An EU-UK FTA would aim to eliminate tariffs. 
  • Based on EU common external tariff, mostly provides similar levels of protection 
  • Uses a 5-year average exchange rate of 83.6p (current rate 90p) 
  • WTO Director General position – Phil Hogan has withdrawn his nomination. 
  • GB Border Controls for EU Goods  to be phased in. (Does not apply to NI-GB trade) 
  • Jan 2021 – Standard goods: traders will have up to 6 months to complete customs declarations & pay tariffs. Live animals & high risk plants will require pre-notification, health documentation & be subject to physical checks at destination or other premises 
  • April 2021 – All products of animal origin (POAO), regulated plants & plant products will require pre-notification & relevant health documentation.  
  • July 2021 – For all goods, declarations & payment of tariffs required at point of importation. SPS commodities: increased physical checks & sampling now at GB border control posts 
  • New GB border operating model expected in July. 

 Northern Ireland Protocol (replaces backstop & aims to avoid hard border in Ireland) 

  • Part of Withdrawal Agreement – takes effect 1st Jan 2021, irrespective of EU-UK FTA or no deal 
  • Requires EU Customs and SM rules to apply to all goods entering NI from GB 
  • EU tariffs to applyunless goods are not at risk of entering the Republic. 
  • UK is to expand infrastructure for SPS checks at NI ports on animals and agri-food and some new customs processesWants to presume goodare for NI unless there is substantial risk they are destined for Republic  
  • Barniera lot of details to be settled  to move from aspiration to operation. 
  • UK says NI businesses will have unfettered access to GB, buy has not set out how this will happen, ie how are NI and RoI goods to be identified? 

 EU negotiating mandat(25th February 2020) 

  • Offers FTA with no tariffs and no quotas 
  • Conditional on level playing field and on terms of a fisheries agreement 
  • Agreement “should uphold common high standards, and corresponding high standards over time with Union standards as a reference point in the areas of state aid, competition, employment, environment, climate change, relevant tax matters. 
  • Specific reference to not reducing standards re health and product sanitary quality in the agricultural and food sector1. 
  • EU reserves right to apply autonomous measures to react quickly to unfair competition. 

 IFA Position 

  • 20th May: IFA video conference with Tanaiste Simon Coveney and Minister Helen McEntee 
  • IFA wants closest possible future trading relationship that maintains value of the UK market for Irish farmers, which in turn will ensure the stability of the EU food market. 
  • Three objectives: 
  1. Tariff-free and quota-free access to the UK market 
  2. Level playing field whereby the UK maintains corresponding standards on food safety, animal health, environment, etc and 
  3. No return by the UK to a cheap food policy, so that their external tariffs and import quotas for sensitive products such as beef, butter and lamb do not undercut the EU. 
  • For GB trade to NI, IFA also requires close SPS and customs checks and controls on all live animals and agri-food products  
  • NI must not become a back-door into the EU for UK’s sub-standard food imports 

 Brexit Support Measures required by Irish Farmers 

  • Govt announced €50m support scheme for beef finishers – see Livestock Report. 
  • IFA had campaigned for €111m for beef price losses from Jan to mid-May 2020, in addition to €160m for May to Dec 2019 losses, and release of €23m unspent BEAM I funding. 
  • IFA is pressing for Government and EU support measures, including: 
  • Full compensation for any further losses during Transition arising from Brexit uncertainty, sterling volatility and COVID-19 impact 
  • Dedicated EU Brexit outcome contingency fund of €1bn with flexibility to be scaled up as necessary to deal with all scenarios including the possibility of no deal, ie to include direct payments to farmers to fully compensate for the reduced value of the UK market in addition to market support measures, and longer-term structural and adjustment funding. 

Bryan Barry
Association Secretary

Background: UK exited EU on 31st January 2020 – in Transition until 31st December 2020

  • UK remains in Single Market and Customs Union during Transition Period
    • May seek TP extension before 1st July, but has declared it will not
  • Irish farmers again face the threat of a disastrous ‘no-deal’ situation, if there is no TP extension and no Free Trade Agreement by end 2020 ie with tariffs on exports to GB and increased competition from third countries.

EU-UK Negotiations on Future Relationship

  • Three rounds of negotiations held since March, most recent ended 15th May
    • 11 working groups – including one on trade in goods (incl food and agriculture).
  • Negotiations are going badly – little progress on key issues
    • EU wants a comprehensive partnership agreement covering all areas – UK wants a series of stand-alone agreements on trade, fisheries and other areas
    • EU wants a level playing field on standards in agri-food, state aid, environment, climate change, taxation, etc – UK rejects alignment with the EU
    • Major differences also on other areas including fisheries
  • Next round scheduled for w/c 1st June
  • EU-UK High Level Conference in June to take stock of progress.

 Other developments

  • UK & US have opened trade talks
    • Reports that UK will offer significant tariff cuts to the Americans despite opposition from some cabinet Ministers (Gove & Eustace)
  • UK government rejected amendments to their Agriculture bill
    • Would have required food imports to be produced to the same standards applying to British farmers (Conservative MP Neil Parish)
  • UK published its Global Tariffs to apply from 2021, which assumes an EU FTA.
    • It is based on the EU common external tariff and would mostly provide similar levels of protection but uses a 5-year average exchange rate of 83.6p (current rate 89.5p).

Northern Ireland Protocol (part of Withdrawal Agreement – to avoid a hard border in Ireland)

  • Protocol requires EU Customs and SM rules to apply to all goods entering NI from GB unless they are determined not to be at risk of entering the SM.
  • UK accepts need for some expanded infrastructure for SPS checks at NI ports on animals and agri-food and some new administrative process for customs
  • UK will presume goods moving from GB to NI are for NI and will only charge tariffs if goods are destined for Ireland or if there is a “genuine and substantial risk of them ending up there”.

EU negotiating mandate (25th February 2020)

  • Offers an FTA with no tariffs and no quotas
  • Conditional on robust level playing field provisions and on the terms of a fisheries agreement by 1st July
    • Agreement “should uphold common high standards, and corresponding high standards over time with Union standards as a reference point” in the areas of state aid, competition, employment, environment, climate change, relevant tax matters.
    • Includes a specific reference to not reducing standards in relation to health and product sanitary quality in the agricultural and food sector[1].
  • EU would have right to apply autonomous measures to react quickly to unfair competition.

IFA Position

  • On 20th May, IFA President Tim Cullinan led a video conference meeting with Tanaiste Simon Coveney and Minister Helen McEntee and set out the following position
  • IFA called for the EU to secure the closest possible future trading relationship that maintains the value of the UK marketfor Irish farmers and food exporters, which in turn will ensure the stability of the EU food market.
  • Our objectives are:
  1. Tariff-free and quota-free access to the UK market
  2. A level playing field, based on the high standards demanded by consumers, whereby the UK maintains corresponding standards on food safety, animal health, environment, etc, and
  3. No return by the UK to a cheap food policy, so that their external tariffs and import quotas for sensitive products such as beef, butter and lamb do not undercut the EU.
  • For GB trade to NI, IFA also requires close SPS and customs checks and controls on all live animals and agri-food products
    • NI must not become a back-door into the EU for UK’s sub-standard cheap food imports

Brexit Support Measures required by Irish Farmers

  • IFA has been campaigning for a BEAM II scheme to cover livestock farmers’ €160m losses from May to December 2019, andthe release of the €23m unspent BEAM I funding.
  • IFA is pressing for Government and EU support measures, including:
    • For 2020 up to 17th May, compensation of €111m for Brexit and COVID-19 related beef price losses
    • Full compensation for any further losses during Transition arising from Brexit uncertainty, sterling volatility and COVID-19 impact
    • A dedicated EU Brexit outcome fund of €1bn with flexibility to be scaled up as necessary to deal with all scenarios including the possibility of no deal, ie to include direct payments to farmers to fully compensate for the reduced value of the UK market in addition to market support measures, and longer-term structural and adjustment funding.

Bryan Barry
Association Secretary

 

[1] Annex to Council Decision 5870/20 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for a new partnership agreement; paragraph 103.


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