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Photo : Nerthuz

Alison Ryan, London Office –Bord Bia – Irish Food Board

35 days until Brexit

Key events from the week:

In a keynote speech to the National Farmers Union, Environment Secretary Michael Gove has confirmed that the government will apply tariffs to food imports to protect British farmers in a no-deal scenario. Gove hinted that tariffs would be applied to beef, dairy and lamb but suggested that zero tariffs were a possibility in some areas such cereals.

The government also announced plans to impose quotas on agri-food imports in a no-deal Brexit, which would allow a set amount of certain products to enter the UK tariff-free. Gove also warned that delays were likely in Calais because of EU mandatory sanitary and phytosanitary (SPS) checks on any food or animal products exported to the bloc from Britain. The tariff scheduled was due to be released this week but reported disagreements between Chancellor Hammond, who is insisting that tariffs should remain low to protect consumers, and Minister Gove who wants higher tariffs to protect British farmers, is causing a delay.

Seven pro-EU Labour MPs resigned from Britain’s main opposition party on Monday morning in a major challenge to its left-wing leader Jeremy Corbyn. The seven MPs are calling themselves the Independent Group and are aiming to seize the centre-ground of British politics. It is expected to trigger an immediate change in Mr. Corbyn’s ambiguous Brexit policy. On Tuesday, the group was joined by an eighth Labour MP who resigned from the party to join the Independent Group. On Wednesday, three Conservative MPs resigned from their party to join the Independent Group. The trio accused the Tory party of shifting to the right and being “in the grip” of the European Research Group, who they called a party within the party. The Independent Group now has 11 members, making it bigger than the DUP and the same size as the Liberal Democrats. The group is rallying behind a proposal from two Labour MPs to back May’s Brexit deal in return for a commitment by her to holding a second referendum.

Following on from a letter sent to Minister Gove last week from a group of 20 food and beverage companies, the government has agreed to suspend a host food and agriculture-related policy discussions and implementations in order to allow companies to focus on no-deal contingency planning.

Attorney General Geoffrey Cox is in Brussels this week with Stephen Barclay for talks with Michel Barnier to try and work through the backstop impasse. Cox is expected to bring papers containing “technical details” of how the UK can gain legal guarantees that Britain cannot be indefinitely bound into a customs unions without reopening the withdrawal agreement.

Theresa May is back in Brussels for further Brexit talks. Following a short meeting, May and European Commission President Jean-Claude Juncker released a joint statement outlining plans for a modest revamp of the Brexit package, which includes guarantees to underline the “temporary nature” of the backstop.

Implications for Irish food & drink companies:

The UK government has not announced the full tariff schedule yet, but Gove’s speech outlined that tariffs and quotas are being prepared for beef, lamb and dairy products. This could result in Irish beef being hit with tariffs of up to 53% if Britain applied WTO rates, which would translate into a €750m hit in the beef sector.

The emergence of the Independent Group, with the new additions of the three former-Conservative MPS, has reduced the government’s fragile Commons majority to nine. The 11 members of Independent Group are all against a no-deal Brexit, which may have implications on the parliamentary arithmetic facing May in upcoming votes in the House.

Looking ahead:

  • The government is set to announce the full tariff schedule on Monday the 25th of February.
  • Theresa May will attend an EU-Arab League summit meeting in the Egyptian resort of Sharm el-Sheikh this weekend, giving her the chance to press her case on Brexit with other European leaders.
  • A key vote is to take place in the House of Commons on February 27th. MPs will vote on an amendment led by former Labour minister Yvette Cooper and Conservative MP Oliver Letwin, which would give power to the government to block a no-deal Brexit if May has not secured parliamentary approval for a revised Withdrawal Agreement by mid-March.
  • A further two Conservative MPs have said they are ready to resign if the party does not change its direction on a no-deal Brexit. Further resignations from both parties may ensue in the coming weeks.

You can find more information here on Bord Bia’s workshops and training programmes, which are designed to help client companies exporting to the UK prepare for Brexit.