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When the EU chief negotiator Michel Barnier spoke to 1,500 people who participated in the IIEA-organised event this week, there was hope among his Irish audience that he could indicate a pathway to a trade deal with the UK that would limit the damage of Brexit.
Unfortunately, it was the complete opposite, in that he used the occasion to emphasise the gap between the EU and the UK.
Tone as well as content worrying
As well as the content being negative, the tone of his comments on the UK were particularly robust. Normally at this point of a delicate negotiation, there would be a virtual media blackout, with comments confined to meaningless soundbites.
Not so this week, with the chief negotiator speaking about the UK not having so far engaged constructively and that they weren’t engaged on open and fair competition, warning that state aid has great potential to disturb trade.
Fish
Fisheries may be minuscule from an economic perspective, but the chief negotiator was blunt in saying that there would be no new economic partnership with the UK unless fisheries were included.
He went on to allege that the UK wanted the benefits of the EU, but without the obligations, saying that the UK could create rules of origin that would enable them become an assembly hub.
He also spoke of the big changes that would occur from 1 January 2021, highlighting that customs formalities will apply, UK approvals will no longer be recognised in the EU and that UK financial services will lose their passporting rights in the EU, irrespective of there being an agreement.
Michel Barnier also paid a warm tribute to Phil Hogan, though he stumbled in answering a question from Justin McCarthy on whether or not Hogan’s departure would have a negative impact on Ireland.
Nightmare prospect for Irish farmers
The prospect of a complete breakdown in EU-UK negotiations is a nightmare for the new incoming agriculture minister Charlie McConalogue, because Irish agriculture is the sector of EU-UK trade that takes the biggest hit, estimated at €1.7bn by the previous Government.
The EU, in its budget for the next seven years, has created a €5bn fund to assist with Brexit trade disruption for the EU27, but when we consider that Ireland alone will take a €1.7bn hit annually, it is clear that this fund will require regular topping up.
Next steps
The next round of talks between the UK and EU will commence in London next week.
Looking at the mood music, it is tempting to wonder if there is any point in continuing negotiations.
The one glimmer of hope is that in the runup to the UK formally leaving the EU, the withdrawal agreement was concluded at the last moment, with the UK departure pushed back for a second time from the end of October 2019 to 31 January this year.
Irish farmers can only hope something similar will happen in this discussion, but, unfortunately, even if there is a deal, there will still be a large administrative burden and the likelihood of the UK being in a position to make deals that will undermine the value of the UK market for Irish agricultural produce.
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