Brexit what are the implications for eu based exporters to the uk
BREXIT AND UK AGRICULTURE IMPLICATIONS FOR IRELAND · Stronger Pound = Good for Irish exporters Bad...
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BREXIT AND UK AGRICULTURE – IMPLICATIONS FOR IRELAND Michael Haverty RDS, Dublin January 2017
Transcript of BREXIT AND UK AGRICULTURE IMPLICATIONS FOR IRELAND · Stronger Pound = Good for Irish exporters Bad...
BREXIT AND UK AGRICULTURE
– IMPLICATIONS FOR
IRELAND
Michael HavertyRDS, Dublin
January 2017
UK PLAN: 12 NEGOTIATING OBJECTIVES
56
7
8
9
10
1
2
3
4
11 12
Certainty on
leaving process
Control UK laws
Strengthen
union of four
UK nations
Maintain
Common Travel
Area with Ireland
Control
immigration
from EUProtect EU and
UK nationals’
rights
Protect
workers’
rights
Free trade
with EU via
trade
agreement
New trade
agreements
with other
countries
UK: best place
for science &
innovation
Crime & terrorism
cooperation
Smooth & orderly
Brexit
Sovereignty
Single
Market
Access
1
1.1
1.2
1.3
1.4
1.5
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
Jan
-16
Jan
-17
€/£
EUR/GBP
Source: ECB / Andersons
Pound and €uro – 2005 to 2017
Stronger Pound = Good for Irish exportersBad for UK farming
Weaker Pound = Bad for Irish exportersGood for UK Farming
SHORT TERM BREXIT UPSIDE
1.0
0.66
IRISH REPUBLIC’S TRADE WITH UK & EU
Exp (€m) 2,240 3,899 720 262 272 12,125 116,343
Imp (€m) 107 691 290 463 21 8,217 70,526
Source: Irish CSO / Andersons *Nov ‘15 to Oct ‘16
Export Destinations from Irish Republic – 2015/16*
50%
22%
56%
85%
21%
40%
13%
44%
29%
16%
8%
73% 30%
38%
6%
49%
28%
7% 6%
30%
49%
Beef Dairy
Produce
Pigmeat Poultry Sheepmeat Total Agri-
food
Total
Goods
UK Rest of EU Non-EU
FUTURE TRADE: UK AND EUROPE
‘Soft
Brexit’
‘Hard
Brexit’
Single
Market
+ least disruptive to trade
- EU migration, regulation & budget
Customs
Union
+ assists trade, migration control
- prevents trade deals with RoW
Free Trade
Agreement
+ bespoke, allows UK ‘control’
- time to negotiate, goodwill?
WTO
Rules
+ ‘complete freedom’
- tariffs on EU trade, not simple
• Agriculture is not automatically covered by these
- excluded from EEA and Turkish Customs Union
- may not form part of FTA
TRADE OPTIONS AND WTO TARIFFS
EU Tariff Examples Standard Tariff Within TRQ Tariff
(€ per tonne) (€ per tonne; %)
Cheese (cheddar) €1,671 €210
Lamb (fresh/chill) 12.8% + €1,710 €0
Beef (fresh/chill) 12.8% + €1,768 20% (frozen)
Pigmeat €536 €268
Poultry cuts (fresh/chill) €512 €0
Source: EU Commission / Andersons
• Non-tariff barriers & trade transaction costs (circa 8-10%)
• ‘Cascading tariffs’ – further upheaval for processed goods
Tariff
WTO Rules
Imports at World Price
SUMMARY: IMPACT ON IRISH EXPORTS
Access to UK
Market
Customs
Clearance
Proof of
Origin
Regulations
Harmony
Transit to
Continent
Trade
Transactions Cost
Customs Union FTA WTO RULES
L H L H L HDegree of Difficulty
OUR OPINION
• UK and EU heavily inter-connected – deal will be done
• Not going to be concluded within two years
- a period where the UK is trading without an agreement?
- ‘bridging’ (Customs Union) deal to extend current rules?
- free trade deal in the long term?
- special arrangements with Ireland.
• Ireland must ensure agriculture forms part of a deal
• If WTO, set-up TRQs to permit “free-ish” trade
- base on historic average plus popn. growth allowance
• Border arrangements based on Norway/Sweden model
- minimise impact on Irish trade when transiting to continent.
• Trade with UK to continue; more competitive pressures
BREXIT AND UK AGRICULTURE
– IMPLICATIONS FOR
IRELAND
Michael Haverty
Tel: +44 (0) 1664 503 200
