Just when it looked like the EU had finally arrived at the point where it was accepting that there was negligible risk to the EU single market from small consignments of goods entering Northern Ireland (NI) from Britain the battle appears to be moving to new ground. If the EU proposals on Wednesday match the weekend leaks, they should address most of the administration and inspection issues at NI ports. However UK Brexit Minister, Lord David Frost is expected to make removal of the European Court of Justice (ECJ) from the Protocol an issue in a speech due to be delivered on Tuesday. If this is the case, it becomes the flashpoint of principle, with the potential to put the structure and viability of the entire Trade and cooperation agreement between the EU and UK comes into question.
The picture that was painted in the run up to the deal being announced on Christmas Eve last year would become real.
That is the ultimate endgame if the UK and EU cannot find a way of making the protocol that facilitates NI participation in the EU and UK single markets work. While that is a long way off and there is an element of stating negotiation positions by the EU and UK in the weekend media, we need to remember the consequences for agriculture if the worst case scenario arises.
If the TCR is suspended, any UK and EU trade would be subject to the schedule of tariffs that both have lodged with the WTO. These are punitive on agri food products. That would cripple NI milk and lambs coming south for processing and similarly for pigs and cattle going the other way. For Irish farmers, particularly in the beef sector, sales to Britain would collapse assuming the UK applied full tariffs. The picture that was painted in the run up to the deal being announced on Christmas Eve last year would become real.
The consequences of this worst case scenario are so terrible that in a way lessens the chance of it happening. Panic buying appears to have set in, especially in the south east of England in recent days and meat is one of the products that has been cleared off the shelves. The immediate consequence of this is that there will be big pressure on supply chains to replenish these stocks and perhaps there will be a realisation that further disruption that would follow a suspension of the TCR is best avoided.
The empty shelves will sustain demand for beef both sides of the Irish border and Irish farmers have also a shield in place in the form of the Brexit Adjustment Reserve (BAR). This €1bn fund hasn’t been required yet and the thinking has been that pressure on Irish prices wouldn’t happen before the UK was opened up to non EU beef and lamb supplies. Any disruption to the current non tariff trading structure bring forward the necessity to use this shield.
Worst case scenarios usually never come to pass but being aware of what they are and how they could come about should trigger preparation by Government, processors and farmers.