Source: It’s the agri-food economy, stupid
In general, agri-food occupies a tiny place in the British Brexit debate. The UK is very much a food buyer, importing almost 40% of what it eats, and is in fact a unique major market in that respect. Agri-food occupies a broader place in the Irish debate, reflecting the reality that (1) we produce far more food than we can consume and (2), if the British don’t buy it we will have the greatest difficulty finding alternative markets. In fact, the threat to the whole economy of this island is so great that we should be paying more attention.
A new report from the Hume Brophy consultancy sets the issue out in the clearest possible terms: “The UK is Ireland’s largest market for food and drink, accounting for 37% of all food and drink exports in 2016, or over €4.1 billion. Ireland is also a significant importer of food, with almost €2.8 billion sourced from the UK.”
Even if the UK were to achieve a comprehensive Free Trade Agreement (FTA) with the EU, it should not be taken for granted, that trade would be fully liberalised. “The EU applies Tariff Rate Quotas (TRQs) to sensitive agricultural products such as beef and dairy in all its existing FTAs and could seek to do similar in a UK/EU FTA.”
The UK would have to adhere to Single-market standards for its food to have access to the EU. It would be free to pursue its own standards regime for imports, but eventual regulatory divergence could be a huge issue, not least for Northern Ireland which currently benefits from food exports being perceived as Irish in marketing terms.
“Will the UK adopt the same food safety standards as the EU? What will happen to the recognition of products such as Scotch or Irish whiskey, currently designated as EU Geographical Indications (GIs) and protected in third markets? How will the UK’s policy to issues such as hormone-treated beef and GMOs(genetically modified organisms) evolve?”
That final issue is something we can expect to hear more of, because any trade deal Prime Minister Theresa May is likely to get out of President Trump would probably involve concessions in these areas. The prospect of GMOs or hormone-treated cattle being brought into our particular corner of the UK would add whole new dimensions of nightmare to fears about our land border. How could the famous frictionless, seamless border deal with threats to our food security?
These are the issues which could arise in the context of an FTA, but the report highlights the likelihood that there will be no such agreement in place in 2019 and we could be facing tariffs on the two-way trade in food. “The EU’s simple average … tariff on agricultural products is 10.7 per cent. However a significant proportion of its tariffs exceed 15% and its maximum tariff is well above 100 per cent.” All food production would be hit but specific product sectors would be devastated: “60% of Irish cheddar cheese is exported to the UK and there are no alternative markets. Similarly, 80% of Irish mushrooms are exported to the UK.”