After a couple of delays and some speculation that they would oppose it, the European Parliament has this week ratified the EU UK Trade and Cooperation Agreement (TCA). The vote in favour was carried by a massive 660 MEPs voting for it, with just five voting against.
This means that the Brexit agreement is now in place which, despite its flaws, is a better outcome than no deal. That would have been the default position if the Parliament had voted against it.
TCA is no single market
The reality of the UK and EU doing business under the TCA – rather than the single market – is becoming more apparent as February trade figures are now available.
Like January, these come with an explanation that the stockpiling in December still had an impact in February and the ongoing presence of a global pandemic is a distorting influence as well.
What is becoming clear is that agri food trade patterns have been most impacted.
The CSO has also revealed with the accompanying caution that Irish imports from Britain in February were less than half what they were in February 2018
From a UK perspective, this week’s UK food and drink association report shows that all major food categories from animal and plant origin show dramatic falls. However, UK trade with the rest of the world outside the EU actually increased for food and drink in February, so it is clear there is a Brexit impact even if it is difficult to be precise in measuring it yet.
The CSO has also revealed with the accompanying caution that Irish imports from Britain in February were less than half what they were in February 2018, while imports from other trading partners were either stable or had increased.
UK digging in on agri access
The two big upcoming threats to Irish farmers and food exporters are the introduction of border controls by the UK in October and January next, plus the likely conclusion of a trade deal between the UK and Australia/New Zealand in the coming months.
This negotiation has slowed down as the UK don’t appear to be willing to go full tariff and quota free as recommended by the UK trade and agriculture commission. Nevertheless, there will still be enhanced access which will displace Irish product.
The decision by the EU Parliament to ratify the TCA is expected to help the wider EU-UK relationship which has been under serious strain since the start of the year because of the NI Protocol.
This effectively allows NI participate in two single markets, the EU and UK but the EU require the implementation of border controls at NI ports on goods entering from Britain. This is both politically sensitive and logistically impossible for small quantities of multiple products requiring veterinary certification.
Negotiations have been ongoing quietly now for a few weeks which suggests that meaningful progress is being made on reaching an understanding.
What has to happen is that a way is found to protect the integrity of the EU single market while enabling supermarkets continue to service their NI stores from distribution centres in Britain. The ultimate solution would be alignment of veterinary standards which would benefit Irish exports to Britain as well.