Food industry urges progress on Irish border deal ahead of May-Juncker Brexit talks

04 Dec 2017 --- Discussions between the UK government and Europe are continuing to thrash out the details of Brexit with all eyes on Prime Minister Theresa May today (December 4) as she prepares for key meetings with European Commission president, Jean-Claude Juncker. But so far there’s still no deal reached in relation to the Irish border, despite weekend talks on the crucial issue. There has been much emphasis to agree on a proposal on how to avoid a hard border in Ireland which many say would be disastrous for trade. 

However, officials say this still needs to be settled as there is some way to go before an agreement is made. 

This has prompted the food industry to step up its efforts to lobby the government to stress just how important reaching good trade deals, and in particular, the Irish border issue is to the future of the UK and Europe’s food and beverages industry. 

FoodDrinkEurope and the UK Food and Drink Federation is reiterating the deep concern of food and drink firms across Europe in relation to the lack of certainty in the Brexit negotiations. 

“We remain particularly concerned by the outstanding issues surrounding the Irish border, where more than half of all movements of goods are in food and drink. Practical and creative solutions will be required from all sides to maintain as frictionless trade as possible, and to avoid unwanted disruption in trade,” says a statement. 

“We are convinced that neither the UK nor the EU27, can afford a 'cliff edge' scenario and time is running out to provide business with the assurances they need.”

They add how a failure to make substantive progress soon will force firms to set into motion contingency plans, based on a worst case, no-deal scenario, which will have important consequences for our businesses and their employees.

“We urge negotiators to agree on transitional arrangements that will apply until an EU-UK trade agreement is in place, to protect the sector's successes and long-term investment and the jobs that we support,” the statement continues. 

“We both strongly support a 'status quo' transition period which allows existing trade and customs arrangements to continue largely unchanged until a new trade agreement enters into force. This will help minimize the uncertainty and cost for business and our consumers.”

The Irish government is also seeking more information on the “frictionless border” that Britain wants to establish so that customs checks are not needed. However, Dublin wants a written assurance from the UK government that the Good Friday agreement will be protected and there will not be a harder border between Northern Ireland and the Republic of Ireland. 

The Prime Minister will present the UK’s final offer to Juncker on the three main issues – the Irish border, citizens’ rights and the financial settlement. May will be accompanied by the Brexit Secretary David Davis for the discussions.

These talks, which will likely continue through to Wednesday, come ahead of a European Council summit scheduled for December 14 where EU leaders will examine whether enough progress has been made in this round of talks to go onto the next phase. 

WTO director general warns of higher prices following a 'hard Brexit'
Meanwhile, the Director General of the World Trade Organization (WTO) has warned the UK that prices would be likely to rise after a hard Brexit; due to supply chain disruption and WTO tariffs, which would be especially high on agricultural products.

In an interview with the BBC, Roberto Azevedo said: “To the extent that the value chain, for example, the production chains, they're disrupted, or the conditions of supplying services, they are disrupted – the tendency is that prices will go up, of course.”

"You have to absorb the cost of that disruption, and that in itself will mean it will be costlier to do business, potentially costlier to live, but it's how much – and it's impossible to predict that at this point in time.”

Azevedo also said that trade negotiations between the UK and the European Union would be difficult and "extremely unpredictable". He said that achieving a smooth exit and a new trade agreement by March 2019 was "ambitious."

Relying on the trade rules of the WTO would mean tariffs on many of the products the UK exports to the rest of the EU, and on EU imports into Britain. Many would be low, at around two to three percent. But some would be higher – on many agricultural products they could be between 20 percent and 40 percent.

By Gaynor Selby