Irish livestock farmers face the real prospect of competing with cheap food imports in the British market in the event of a no-deal Brexit, if proposals put to the Theresa May’s cabinet on future tariffs are agreed this week.
The Irish Farmers Journal can exclusively reveal the plan being put to UK ministers for agreement. It is driven by three specific objectives:Keeping food prices stable to British consumers.To safeguard British farmers.Not to undermine future negotiations on trade with other countries.
As a result, it is understood that unilateral zero tariffs will not be introduced, as it would leave the UK government in a weak negotiating position when trying to secure future deals.
Instead, tariffs will be applied that will vary sector by sector. The arrangements are seen as temporary, until such time as the UK is able to agree trade deals post-Brexit. However, it is still recognised that the temporary regime could last years.
Under the plan, goods that are not routinely produced in the UK (such as bananas or oranges) are likely to face very low or zero tariffs.
It is bad news for the Irish beef industry, and potentially bad for the UK beef industry as a whole, as it will be competing against much cheaper imported product
In sectors that have UK producer prices close to the global average, the proposal is for tariff rates to also be set at relatively low levels. That group of sectors is thought to include the pig industry, while low tariffs could also apply on some dairy products.
There is then what are classed as "sensitive" sectors and products, which is believed to include some poultry and dairy products, and also the wider UK beef industry.
The plan put to ministers on beef is for the UK to adopt the same World Trade Organisation (WTO) tariffs that apply on beef in the EU, to stop the market being flooded with much cheaper product from South America, the US and Australasia. However, the UK would continue to retain its share of existing EU deals that allow in some beef tariff-free, or at preferential rates (Hilton quota).
With the Republic of Ireland being the major exporter of beef into the UK market (supplying 205,000t in 2018), accounting for over 70% of all UK beef imports, there would still be a massive gap to be filled.
It is understood that the UK will offer tariff rate quota to cover the existing amount of EU imported beef. That would allow this amount of beef to come in tariff-free, but it would be done on the principle of erga omnes – in other words, any country in the world could fill the quota.
It is bad news for the Irish beef industry, and potentially bad for the UK beef industry as a whole, as it will be competing against much cheaper imported product.
That leaves the UK sheep sector, which the UK government accepts is the sector most exposed to a no-deal Brexit.
The plan for it is to adopt the EU tariff schedule in full. On the face of it, that might seem like a good outcome, but the problem still remains during peak season. If the UK industry faces a high tariff on exports to France, the British market will be oversupplied, and the market risks a severe crash.
In addition, the UK government has also already accepted that it will take on half of the New Zealand (NZ) EU tariff-free lamb quota after Brexit, effectively allowing an additional 114,184t onto the UK market.
Given that the UK sheep industry is already 100% self-sufficient in lamb, that additional NZ lamb just makes a bad problem look much worse.
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