Beef and dairy sectors need to be ‘prioritised’ in Brexit negotations

Calls have been made for the prioritisation of the Irish beef and dairy sectors in the upcoming Brexit negotiations.

Yesterday, the UK government formally began exit or ‘divorce’ proceedings from the EU as it presented the signed Article 50 document to the European Council President Donald Tusk.

This could clear the way for a UK exit in March 2019.

On the back of this, two separate IBEC groups, the Irish Dairy Industries Association (IDIA) and Meat Industry Ireland (MII) have called on the Irish Government to make their respective sectors a key priority in the upcoming negotiations.

Speaking after the triggering of Article 50, IDIA Director, Conor Mulvihill, said: “Irish diary is the fastest growing agri-food industry in the EU and provides much-needed jobs right across rural Ireland”.

“It is a global leader in specialised nutrition in the sports, wellness and infant sector. Brexit, however, poses a clear and present threat to this success.

“Disruption to trade between Ireland and the UK has already begun, due to currency pressures,” he added.

“Already this year 10,000t less of cheddar have been delivered to the UK by Irish companies, compared to this time last year,” he said.

To safeguard diary supply chains and the flow of dairy products into the future, the IDIA said the Brexit negotiations must:

  • Deliver free and unfettered access to the UK market for Ireland;
  • Take account of the special case of the all-island economy, and ensure that highly-integrated supply chains can continue to operate with free movement of goods and services;
  • Include transitional arrangements, of sufficient length for businesses to plan and prepare for any new free-trade agreement;
  • Ensure the issue of customs procedures is dealt with as part of the first phase of Article 50 negotiations.

The IDIA also warned against the danger of no new trade deal and a default to WTO trade terms.

“WTO tariffs are set at a punitive €1,671 per tonne for cheddar cheese. This would amount to an additional minimum of €130m per year in costs for Irish exporting companies.

“A WTO tariff cliff edge would be disastrous for the industry, as the UK represents the only viable market for Irish cheddar,” he said.

Mulvihill added that supply chains between Ireland and the UK are deeply integrated, with strong north/south and east/west ties on these islands.

The imposition of a hard border would fracture the milk pool here, and would cause untold problems for our hard-fought international reputation as a global leader in this sector.

“It is essential that our Government acts now to maintain certainty and clarity over regulations, rules of origin, and food safety for Irish dairy products,” he said.

56% of Ireland’s meat exports sold to the UK

In addition, MII Director Cormac Healy also highlighted the critical importance of maintaining business certainty during Brexit negotiations.

56% of our meat exports – accounting for in excess of €2 billion annually – are sold into the UK market.

“A positive outcome to negotiations is crucial. A hard Brexit will result in massive trade disruption and job losses whereas a sensible outcome, aimed at maintaining trading continuity, will be beneficial to both Ireland and the UK,” he said.

The EU-27 negotiating mandate must ensure:

  • Future trading relations with the UK are high on the priority list;
  • Trade negotiations must start at the earliest opportunity and run in tandem with the exit negotiations;
  • A realistic transition period, leading to a negotiated free-trade agreement with the UK, must be delivered to avoid damaging ‘cliff-edge’ scenarios and to ensure business certainty in the interim.

Healy added that, amongst our EU-27 partners, Ireland is uniquely exposed on its agri-food trade with the UK.

“This must be prioritised by Government.

“IBEC and MII are working with all of our members to ensure that they are adequately equipped to deal with the immediate challenges of Brexit and plan for future trading eventualities,” he concluded.