The final formal round of negotiations on a future trading arrangement between the EU and UK have been ongoing in Brussels this week. Getting a deal of any sort at this stage is looking difficult but even if something is put together at the last minute, it is expected that it will be a basic rather than comprehensive trade agreement.

A basic agreement would mean no tariffs and no quotas on the trade of goods between the EU and UK, and avoid the €1bn plus of tariffs on Irish agri-food exports to Britain that would wipe out this business.

However, it would not avoid the very significant administrative cost that will come with reverting to the trading terms that existed until 1 January 1993 when the single market between all EU member states came into effect. This creates a significant volume of paperwork and inspections in trade between an EU member like Ireland and Britain, with exceptional arrangements provided for Northern Ireland in last year’s withdrawal agreement.

Brexit webinar

These were detailed by Michael Haverty from Andersons, a UK-based consultancy at last week’s Irish Farmers Journal Brexit webinar (in partnership with Northern Ireland’s Livestock and Meat Commission). Basically, where there is a requirement at present for just commercial documentation, this would be replaced by a 15-step process to ensure compliance with health and customs rules from 1 January 2021.

Fifteen steps

Even before the export process begins, exporters have to secure an export operator registration and identification number (EORI) and have approval from the UK for both the country and exporter. The potential importer in Britain must also secure a licence from the UK Rural Payments Agency.

The export process itself requires commercial documentation plus health certification and export accompanying documentation (EAD), an export declaration. This is used by the Irish revenue to generate a movement reference number (MRN) which is required to board the ferry leaving Ireland and has to be notified in advance to the ferry operator via a pre-boarding notification system.

The importer is obliged to give notice of what is expected to arrive in advance of landing

This process has to be repeated for UK customs at the import ports in Britain, with the goods vehicle movement service (GVMS) notified in advance. The importer is obliged to give notice of what is expected to arrive in advance of landing and a UK MRN will be generated which is also given to the GVMS to create a goods movement reference (GMR) number. This is critical and required by a haulier in advance of boarding a ferry to a UK port from any EU country including Ireland.

They also have to book loads at the arrival port and maintain records for any VAT or tariffs owed

As well as all this, there are additional requirements for UK importers from the EU. The importer is required to notify IPAFFS, the UK control system for food safety and sanitary and phytosanitary controls.

They also have to book loads at the arrival port and maintain records for any VAT or tariffs owed. Some of these import procedures will be phased in over the first half of 2021 and won’t apply to trade across the border on the island of Ireland because of the withdrawal agreement’s Irish protocol, assuming it functions as intended.

Cost of doing business

This bureaucracy does not reflect the likely delays at ports, which could have the most negative effect of all on the transport of perishable goods from Ireland to Britain. This was estimated by Andersons to be up to £150/t on fresh beef with a limited shelf life for an average load and as high as £1,100/t for what they described as the “unlucky load” which is delayed by a detailed inspection and likely to apply to only one in 100 consignments.

Translating this to a cost per kilo on a beef carcase means that the average cost of administration necessary after 1 January 2021 on beef shipped from Ireland to Britain would be up to 10p/kg (11c/kg). In the most extreme case for the “unlucky load”, the £1,000/t (€1,100/t) on fresh beef destined for high-value markets with limited shelf life, would be the equivalent of approximately 80c/kg on carcase. While this would be exceptional, up to 10p/kg (11c/kg) on a carcase is the average expected cost estimated by Andersons to do business on beef with a basic trade deal.