British Prime Minister Boris Johnson and European Commission president Ursula von der Leyen dined on fish in Brussels, but didn’t resolve their differences on fish or maintaining a level playing field between the EU and UK.

This, from an EU perspective, is essential if it is to allow a non-member such as the UK full uncontrolled access to EU markets without tariffs or quotas.

The UK sees having to adhering to these EU rules and an enforcement arrangement for them as an interference in their sovereignty that they will not accept.

Impact on farmers

Irrespective of the complexities in the negotiation, the reality is that the EU and UK are 21 days away from imposing tariffs on trade between them.

For many products, the cost is relatively small and manageable, with the additional burden of administrative red tape the real concern.

However, for Irish agriculture, the prospect of tariffs is potentially a €1.5bn hit, with beef carrying €750m of this and cheese, cheddar in particular, carrying €400,000.

This will be a huge blow and while there may be options in the dairy sector to switch to other cheeses or indeed different products altogether that can be sold outside the UK, beef doesn’t have that option.

The reality is that there is no alternative market for the 250,000t of Irish beef exported to Britain annually.

Bonanza for British beef

If the worst case arises in 21 days’ time and the EU and UK commence trading with each other with full tariffs, Irish and other EU beef will effectively be priced out of the UK market.

However, it will be a bonanza for Northern Irish and British farmers, as the tariffs would have the effect of making imported beef on average 70% more expensive.

In this scenario, there would be unprecedented demand for UK origin beef that carried no tariff and, as the UK consumes at least 20% more beef than it produces, farmers there could expect a beef price bonanza.

It is also likely that there would be a surge in demand from the North for southern cattle, because, if they are slaughtered in NI, they are almost certain to qualify as domestic UK production and escape any import tariff.

This principle may extend to include carcase beef slaughtered in the Republic of Ireland but deboned and processed in Northern Ireland.

There is uncertainty around this because the UK hasn’t yet defined what would qualify as UK origin produce in relation to meat.

May still be a deal

Of course, there may still be a deal that avoids tariffs and quotas for trade between the EU and UK.

That would avoid some of the pain for Irish exports to Britain, though the administrative burden with customs and veterinary paperwork, as well as inspections, would be considerable in itself.

There is also the longer-term issue of UK trade policy and opening the market to lower-cost imports from around the world.

These are a problem, but nothing like the impact a 70% tariff on 1 January 2021 would be on Irish exports of beef and cheddar to Britain.

Read more

Deal or no deal, Brexit threat remains for farmers

Brexit going right to the brink

NI protocol restored, but east west trade uncertain