Coveney: ‘There are new risks now with the British market’

Following the UK’s departure from the EU, there are “new risks now” with the British market for Irish agriculture, according to Minister for Foreign Affairs Simon Coveney.

Speaking at the North Tipperary Irish Farmers’ Association (IFA) county executive annual general meeting yesterday evening (Tuesday, January 12), the minister revealed that, while tariffs and the worst impacts had been avoided, bureaucracy, paperwork and delays could see the costs of exporting to the UK rise by up to 10%.

The minister attended the virtual IFA AGM after being asked by local Tipperary Senator Garret Ahearn and North Tipperary IFA chairwoman Imelda Walsh.

Speaking at the event, Minister Coveney said:

“Many of the pressures that we have felt over the last two years in particular on beef, I can tell you would have been put into context because of the enormity of the challenge we may have faced.

“We don’t have to face that now.

That doesn’t mean that we don’t have a plan for the future in a different context than would otherwise be the case if it hadn’t been for Brexit – because I think we do. There are new risks now with the British market.

Expanding on this, the minister explained: “We can continue to trade without risks and without quotas; that’s true.

“And I think we can hold market share because of that, which is hugely important for beef and dairy prices, but there is a lot more hassle now in the context of that trade.

“In terms of the checks, the bureaucracy, the paperwork, the delays – and ultimately what all of that means is cost in terms of selling into a market that is no longer part of the European Union or single market, or customs union.

“It’s a market that we have a trade agreement with, like other countries in the world, but that is certainly not the same as what we had before.

It depends on how you calculate the impact on prices potentially of that new reality in terms of bureaucracy and delays and costs but some people have put that figure at as high as 10% in terms of cost to the sector increasing; others lower than that.

“We’ll have to see how the new systems work out,” the minister said.

Pointing to another threat, Minister Coveney highlighted the potential risks of the UK outside of the EU, doing their own thing:

“How would we respond if a future British government – or this British government – decides to pursue a cheap food policy in the future?

“In other words should they try to put trade deals in place quickly with Mercosur, with the US, with other parts of the world that may produce food differently to what is required in the EU – and therefore put us at a cost disadvantage in terms of competitiveness?”

The minister underlined that Irish beef, while really good quality and produced in a very safe and environmentally sound way, “we know that it’s not cost-competitive in most meat markets around the world”.

And so, we do have to be aware of the risk now of a future British government deciding to source food products that they currently source from Ireland and the EU from other parts of the world, trying to do it more cheaply.

Continuing, the minister said: “Personally, I think that that is unlikely to happen in the short term. But that doesn’t mean that we shouldn’t think about contingency planning should it happen.

“There is of course a big consequence for the UK if they decide to start importing food that doesn’t comply with EU standards in terms of the UK’s ability then to be able to sell and process food on into the EU – or the inability to be able to do that, in fact.”

Minister Coveney noted that such a move would have other consequences also because of the deal signed, “which commits to fair competition in the future in areas like environment, workers’ standards, consumer protection, animal husbandry, climate and many other areas as well in terms of a level playing field around how products, and food, is produced.”

There are as many protections as we could have designed into the deal – but that doesn’t mean that we don’t need to be certainly aware of potential risks in terms of future policy decisions made in Westminster and how we may react to it.

“Over time, whether we look to create other markets away from the UK that we reduce our, what I would regard as over-reliance on the British market for the food that we produce.

“That doesn’t mean that we shouldn’t provide food into the UK as it is our most valuable market – it will be next year and in my view it will be in five years’ and 10 years’ time, unless a future UK government does something completely unexpected,” the minister concluded.