This weekend marks the real beginning of the negotiations for the UK to leave the EU when the EU’s Brexit priorities will be announced, however they aren’t expected to vary much from what is already in the public domain.

Once the Council of Ministers finalises the EU negotiation position this weekend, the brief will be handed over to the EU Commission – which will handle the day-to-day negotiation activities under the leadership of Michel Barnier, the EU’s chief negotiator.

While the UK has focused on reclaiming control of national sovereignty, in particular over migration and the courts, the EU is focused on getting the UK to settle the financial account before moving into substantive discussions about the future.

The other top line priorities are the status of EU nationals in the UK, as well as Ireland’s unique position. The fact that Ireland is on both the UK and EU’s priority list is a great start, the real issue will be how the good will translates into dealing with the threat exposed to Irish industries.

Beginning negotations

Negotiations can officially begin next week, but don’t expect anything major before the French and German elections are concluded. While France will have its new president next weekend, Germany doesn’t vote until the end of September. It will be then that the real talking will start.

With Brexit scheduled to happen at the end of March 2019, that will be just 18 months away. A further squeeze also comes at the other end, because any deal has to be approved by the EU institutions of the Commission, the Council of Ministers and the Parliament.

The Parliament is the most cumbersome, given that it has almost 800 members with a divergence of views. To allow time for the approval process means talks would have to conclude well before the end of 2018, which is very ambitious.

Who holds the aces?

From purely an economic perspective, the UK depends on the EU for 45% of its exports, whereas EU countries’ main trading relationships are within the EU, although there are certain categories that are particularly dependent on the UK. These include German cars, Belgian confectionary, Spanish, French and Italian wine and, of course, Irish agricultural produce. While recognising these categories, overall the EU has the stronger negotiation position on trade.

This, however, could change if the UK was to decide in the event of a breakdown that it would aggressively pursue a free market agenda or Singapore model of low tax and light touch regulation. The UK is a big enough country to achieve that and if it choses to do so, it could make life difficult for the EU 27.

More than trade

While trade is important to farmers and the business world, it isn’t the only one. One area where the UK has a particular edge is in defence and security, which is a major issue given the attacks that have taken place across a number of EU locations. UK intelligence is vital in trying to infiltrate terrorist groups and at a wider level, being with France the only nuclear power in the EU, the UK is vital for wider EU security and stability. This resonates in particular with former Eastern block countries that were quickly accepted into the EU following the fall of the Iron Curtain.

Overall, each party has the ability to hurt the other greatly if negotiations don’t go well. Each side getting what it wants isn’t possible and trade-offs will have to happen to avoid a breakdown. The EU would be considered to have the most experienced negotiation team and the EU does negotiations very well. However, the UK has a very clear objective and vision of what it wants – the only question is what price it is prepared to pay, or will it settle for something slightly less at a more affordable price?

What about Ireland?

The issue is, what about farmers on the island of Ireland? Other categories can survive better, but finding markets for half of Irish beef and cheddar simply isn’t practical. Similarly, where will Northern Ireland farmers go with the 45% of lambs that go south for processing or 30% of milk that is processed across the border?

It appears to be a good start to have prominent references to Ireland in the EU position. There seems to be a genuine desire in Brussels that Ireland shouldn’t carry the price of the UK deciding to leave. Ireland is recognised as a good European and there is a realisation that the Irish people took one for the team in the banking crisis. At that time, Ireland could have brought down the euro and collapsed even the big EU banks.

The pros and cons of that debate are for others, but Ireland has credit in the EU and this could be the occasion when it is recognised in a meaningful way. What form or shape this might take isn’t clear, but if the agreement was secured in principle that the EU would share the Irish burden, it would represent a result.

For Northern Ireland farmers, the future of support payments will depend on Whitehall and the strength of the agriculture lobby there. NI looks particularly vulnerable on lamb, as the UK is the third biggest exporter of sheep meat in the world, mainly to France and live exports from north to south.

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