Proposed tariff regime would be ‘disastrous’ for Irish food exports

IFA warns proposed UK tariffs could cost Irish beef sector almost €800 million

The proposed British tariffs include 53 per cent of the existing EU rate on beef. Photograph: Brenda Fitzsimons

The proposed British tariffs include 53 per cent of the existing EU rate on beef. Photograph: Brenda Fitzsimons

 

The proposed no-deal Brexit tariff regime announced on Wednesday would be a “disastrous scenario” for Irish food exports if implemented, the Irish Farmers’ Association (IFA) has warned.

Following UK prime minister Theresa May’s Brexit vote defeat in Westminster on Tuesday evening, the British government published a temporary tariff regime for a no-deal scenario which would mean the UK would not apply tariffs on goods crossing the Border into Northern Ireland.

However, goods entering the rest of the UK from the Republic would face tariffs.

The new tariff schedule would apply from 11pm on March 29th in the event of a crash out of the European Union and would be in place for up to 12 months.

It’s understood that while 87 per cent of UK imports would face no tariffs under the proposed temporary no-deal plan, tariffs would be high in some sectors and would be a particular threat to the Irish beef and dairy sectors. Under the new temporary regime, tariffs would apply to lamb, poultry and shoes, although they would be levied at lower rates.

Tariff rates

The headline rates published by the British government represent a percentage of the existing rate imposed by the EU on imports from countries which do not have a free-trade agreement.

They include 53 per cent of the existing EU rate on beef, which equates, for example, to 6.8 per cent on boneless beef plus €160.10 per 100kg and 6.8 per cent on unboned beef and €93 per 100kg.

“Our most exposed sectors, particularly beef, simply will not survive the kind of tariffs being talked about. This would have a devastating effect in the rural economy,” IFA president Joe Healy said.

“We export over 50 per cent of our beef to the UK. If this is subject to tariffs, it will be a direct hit of almost €800 million on the sector,” he said.

Other rates include 60 per cent of the existing EU rate on poultry, 32 per cent on butter, 13 per cent on cheddar cheese, 11.9 per cent on fish/seafood, and 83 per cent on milled and semi-milled grain. The existing EU tariff applied to non-EU lamb would be applied in the UK.

Mr Healy added that if the UK decided to have zero tariffs on food imports, this would also be hugely problematic as it is likely, under World Trade Organisation rules that zero tariffs would be applied to all countries. This could expose Irish food to competition from low-cost, low-quality imports from non-EU countries.

A tariff rate quota regime would see a similar situation where Ireland would have to compete against low-cost imports for its part of that quota.

“Overall any no-deal UK regime will be very damaging for Irish farmers,” Mr Healy said.

UK perspective

It’s not just Irish businesses which fear the impact of a potential no-deal outcome. Nigel Driffield, professor of international business at Warwick Business School, warned that a no-deal Brexit would render UK firms “at a significant disadvantage and lead more firms to conclude that they need to move at least some activities to the EU”.

He added that it will also make it more difficult for European businesses to invest in the UK economy, “which could put almost 20 per cent of current jobs – including relatively ‘good jobs’ – at risk”.

The British Food and Drink Federation has also come out strongly against the proposed tariffs, arguing that it was “disgraceful” that businesses would have just two weeks to adjust.

“This new system is confusing and complex. It includes some zero tariffs, some new tariffs and some quotas. Some foodstuffs qualify for partial protection and some not for any protection at all; with little logic to explain the difference,” the federation’s chief executive, Ian Wright, said.

“New tariffs will apply to some foods that are currently imported tariff-free, yet no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland. This is likely to result in massive trade distortions.” – Additional reporting: Guardian