May’s Brexit deal ‘offers best pathway for industry’

While much of the country continued to speculate over the possibility of Prime Minister Thersa May ever being able to gain the backing required for her Brexit deal, details in the 500-page document point towards a “business as usual” free trade arrangement with the EU which includes food and farm produce, it has been revealed.

Speaking ahead of delivering the opening address at today’s Texel sheep society’s conference in the north of England, SRUC senior agricultural economist Steven Thomson, pictured, said that the proposed agreement offered an element of stability for the farming sector.

“The good news is that the document states that it is the aim of the agreement to have ongoing free trade arrangements on all goods which would mirror the status quo,” he said. “The ambition is for zero tariffs, no fees, charges or quantitative restrictions across all goods and sectors.”

Thomson said that such an approach would not only help producers in the UK, it would also benefit EU producers, including beef and dairy farmers in Ireland and

Spanish fruit and veg growers, who benefited from over £2 billion of trade with the UK each year.

Conceding that much of the detail would still have to be thrashed out in later discussions on the future relationship which would follow during the so-called implementation phase if and when the initial part of the deal was agreed – he said he believed that that agreement on a deal would be far less disruptive to the industry than being thrust into a “no-deal” WTO arrangement.

Pointing to the fact that a “no-deal” was likely to see high tariffs charged on UK exports of beef and lamb going to the continent, as an example he said that for trade to continue under this scenario, buyers in France would have to be willing to pay more than half as much again for UK lamb.

“Or, what is more likely, the price paid to lamb producers in this country would have to fall by almost 50 per cent to cover the extra costs of a tariff,” he commented.

He also said that under a “no-deal”, the more a product was processed, the higher the tariff charges were likely to be – meaning that even if the economics of exports could be made to add up, the majority of the value added processes were likely to be carried out after export to EU countries.

“And even although the beef and dairy sectors might profit somewhat from a ‘fortress Britain’ approach, there’s very little chance that the politicians would allow any substantial level of food inflation – and so tariffs on imported food would be reduced to the industry’s detriment.”