Half­way to Brexit

IFA says there could still be cliff edges ahead for our agri-food sec­tor

Irish Examiner - Farming - - COMMENT - Stephen Cado­gan

The IFA has set out its Brexit ob­jec­tives — no bor­der on the is­land of Ire­land, no bor­der in the Ir­ish Sea, and no scope for the UK to pur­sue a cheap food pol­icy which would de­value the UK mar­ket and in turn desta­bilise EU mar­kets.

“IFA’s con­sis­tent pol­icy is the best out­come for the Ir­ish agri-food sec­tor is that the UK re­mains in the SM and CU. If this is not pos­si­ble, we need a com­pre­hen­sive fu­ture part­ner­ship with the UK

What ex­actly are the cur­rent Brexit ne­go­ti­a­tions about?

>> IFA: Ne­go­ti­a­tions be­tween the EU and UK com­menced in June 2017 and are aimed at achiev­ing a with­drawal agree­ment (WA) by Oc­to­ber 2018. The WA then has to be rat­i­fied by EU27, the Euro­pean Par­lia­ment and the UK Par­lia­ment, in ad­vance of March 29, 2019.

What’s in­volved in the with­drawal agree­ment? What will it in­clude?

>> IFA: The draft WA is a 120plus page in­ter­na­tional treaty in le­gal form un­der which the UK will leave the EU.

It builds on the EU-UK joint re­port agreed in De­cem­ber 2017, which the EU as­sessed as achiev­ing “sufficient progress” in phase 1 of ne­go­ti­a­tions to move on to phase 2. The WA will in­clude sec­tions on cit­i­zens’ rights; the fi­nan­cial set­tle­ment, re­ported to be €45-€55bn, the tran­si­tion pe­riod, Ire­land, and the Frame­work for the Fu­ture EU-UK Re­la­tion­ship in­clud­ing trade (a po­lit­i­cal dec­la­ra­tion ac­com­pa­ny­ing the WA).

What progress was made at the re­cent Euro­pean Coun­cil? >> IFA: Progress on three things:

The cit­i­zens’ rights and fi­nan­cial set­tle­ment pro­vi­sions of the WA;

The WA text for the tran­si­tion pe­riod re­quested by the UK;

EU agree­ment to start ne­go­ti­a­tions on the frame­work for fu­ture EU-UK re­la­tion­ship, ac­cord­ing to the EU Coun­cil’s guide­lines.

What is the tran­si­tion pe­riod and what does it mean for Ir­ish farm­ers?

>> IFA: The tran­si­tion pe­riod will ef­fec­tively ex­tend UK mem­ber­ship of the sin­gle mar­ket (SM) and cus­toms union (CU) for 21 months, from Brexit Day, March 29, 2019, to De­cem­ber 31, 2020. The UK will still have all the obli­ga­tions of mem­ber­ship, but will not par­tic­i­pate in EU de­ci­sion-mak­ing. There is no pro­vi­sion to ex­tend the tran­si­tion pe­riod be­yond 2020.

The UK will be al­lowed to ne­go­ti­ate trade deals with third coun­tries, but they can­not come into ef­fect un­til Jan­uary 1, 2021.

The main ben­e­fit for Ir­ish farm­ers and food ex­porters is that the tran­si­tion pe­riod gives them more cer­tainty in plan­ning their busi­ness up to De­cem­ber 31, 2020.

So, now that the tran­si­tion pe­riod is agreed, there will be no cliff-edge at end-March 2019? >> IFA: The EU is clear that “noth­ing is agreed un­til ev­ery­thing is agreed”. There­fore, while the prospects for a deal have im­proved, dif­fi­cult ne­go­ti­a­tions lie ahead.

What re­mains to be agreed, and is it rel­e­vant to farm­ers? >> IFA: The two sides are about half way to­wards achiev­ing the WA. How­ever, the re­ally cru­cial is­sues for farm­ers and the agri-food sec­tor are still to be de­cided and these are: Ire­land/North­ern Ire­land, crit­i­cal for farm­ing and the econ­omy in the Bor­der coun­ties and for the Good Fri­day Agree­ment;

The frame­work for the fu­ture EU-UK re­la­tion­ship, which deals with trade and will be vi­tal for Ir­ish farm­ers’ in­comes.

Where are the ne­go­ti­a­tions on Ire­land? And what’s the ‘back­stop’?

>> IFA: In the De­cem­ber EUUK joint re­port (para­graph 49), the UK spelled out its “guar­an­tee of avoid­ing a hard bor­der” (no phys­i­cal in­fra­struc­ture at the bor­der), and how it would be achieved: Op­tion A: Through the over­all EU UK re­la­tion­ship, so there would be no need for a hard bor­der. or Op­tion B: The UK would pro­pose spe­cific so­lu­tions for a cus­toms part­ner­ship or cus­toms ar­range­ment (tech­nol­ogy, etc). or, in the ab­sence of A or B, Op­tion C: The back­stop so­lu­tion whereby the UK would “main­tain full align­ment” with the rules of the SM and CU in­def­i­nitely.

So, what’s the prob­lem?

>> IFA: There is no agree­ment on the le­gal text of the WA to give ef­fect to para­graph 49 of the joint re­port. And in para­graph 50, the UK gave a com­mit­ment (to the DUP) that there would be no new reg­u­la­tory bar­ri­ers be­tween North­ern Ire­land and the rest of the UK (no Ir­ish Sea bor­der). At the March 2018 coun­cil meet­ing, how­ever, the EU 27 ac­cepted a let­ter from Theresa May in which she again guar­an­teed no hard bor­der, and com­mit­ted to agree­ing a le­gal text for the back­stop. In­ten­si­fied ne­go­ti­a­tions on Ire­land are now tak­ing place on this, along­side talks on the fu­ture re­la­tion­ship.

What are the EU’s guide­lines for the fu­ture re­la­tion­ship?

>> IFA: The EU wants the clos­est pos­si­ble part­ner­ship with the UK on trade, based on a level play­ing field, and other ar­eas such as se­cu­rity and for­eign pol­icy.

For trade in goods in­clud­ing food, this means zero tar­iffs and no quo­tas.

It says the UK’s po­si­tion of leav­ing the SM and CU will in­evitably lead to fric­tions in trade. Di­ver­gence in ex­ter­nal tar­iffs and in­ter­nal rules will mean checks and con­trols. It rules out cherry-pick­ing or a sec­tor-by-sec­tor ap­proach that would un­der­mine the SM. If the UK’s po­si­tion evolves, the EU will re­con­sider its of­fer.

What’s IFA’s po­si­tion?

>> IFA: IFA’s con­sis­tent pol­icy is that the best out­come for Ir­ish farm­ing and the agri­food sec­tor is that the UK re­mains in the SM and CU. If this is not pos­si­ble, then we need a com­pre­hen­sive fu­ture part­ner­ship with the UK in­clud­ing: Tar­iff-free and quota-free trade;

Full UK reg­u­la­tory align­ment to EU stan­dards on food safety, animal health, wel­fare and the en­vi­ron­ment; Full UK align­ment to the EU’s com­mon ex­ter­nal tar­iff.

So, if the EU and UK reach a deal on the WA that is rat­i­fied by both sides, then it’s all sorted? >> IFA: No, we’re still not sorted. Re­mem­ber that the WA treaty only en­vis­ages a po­lit­i­cal dec­la­ra­tion on the frame­work for the fu­ture re­la­tion­ship.

There can’t be a full treaty on the EU-UK fu­ture re­la­tion­ship un­til after the UK has left, and some ob­servers be­lieve these de­tailed ne­go­ti­a­tions could take years.

The tran­si­tion pe­riod pro­vides about two years to get this done by end-2020, so that’s a tight dead­line. That means an­other pos­si­ble cliff-edge on Jan­uary 1, 2021, un­less the tran­si­tion pe­riod is ex­tended, and there is no pro­vi­sion for that, as it stands.

Pic­ture: Ja­son Clarke Pho­tog­ra­phy

Guest speaker Agri­cul­ture Min­is­ter Michael Creed TD with Pro­fes­sor Alexan­der Evans, UCD dean of agri­cul­ture, at last week’s UCD’s Brexit Half Way There de­bate.

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