The UK government published details of the UK’s temporary tariff regime for no deal this morning [March 13], saying it designed to minimize costs to business and consumers while protecting vulnerable industries.
The briefing is being published ahead of the vote at Westminster today on a No Deal to ensure MPs are fully informed. Today’s vote follows the rejection yesterday evening of Theresa May’s Brexit deal by the House of Commons, the second time her deal was shot down.
The tariff regime would only apply for up to 12 months while a full consultation and review on a permanent approach to tariffs is undertaken, said the UK government.
British businesses would not pay customs duties on the majority of goods when importing into the UK if it exits the EU without an agreement. Under the temporary tariff, 87% of total imports to the UK by value would be eligible for tariff free access.
However, tariffs would still apply to 13% of goods imported into the UK including a mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy products, causing alarm in Irish farmers.
“Our most exposed sectors, particularly beef, simply will not survive the kind of tariffs being talked about. This would have a devastating effect in the rural economy,” said the IFA president.
“We export over 50% of our beef to the UK. If this is subject to tariffs, it will be a ‘direct hit’ of almost €800m on the sector,” added Healy.
Zero tariffs also problematic for Irish agriculture
If the UK decide to have zero tariffs on food imports this would also be hugely problematic as it is likely, under WTO rules that zero tariffs would be applied to all countries, said the IFA. This could expose Irish food to competition from low cost, low standard imports from non-EU countries, it explained.
Minette Batters, president of UK farmer representatives, the NFU, said
"While we are relieved that we are finally able to see the tariffs that will be applied on imported food in a ‘no-deal’ scenario, it is appalling that we only now have this opportunity to do so - a fortnight before they could come into effect. Farmers and food businesses have no time to prepare for the implications, which will be exacerbated by the fact that we will face tariffs on our own exports on food into the EU and other countries with whom we currently enjoy free trade arrangements."
She said while farmers recognize the importance of ensuring food prices for UK consumers do not rise in a no-deal Brexit, they are deeply concerned that the approach to tariffs published today will mean a greater reliance on food produced overseas.
"This would not necessarily lead to cheaper food for consumers but would mean we export and increase the environmental impact of our food production while losing control of the high standards of animal welfare to which that food is produced. In a no-deal scenario the government must act immediately to revise these tariffs and quotas should this happen.
“But more importantly, the publication of this tariff is another example of how British farming will be damaged by a no-deal Brexit. No-deal must be taken off the table and a workable solution identified by MPs and government as a matter of urgency that takes us into an orderly Brexit.”
Feed sector reaction
James McCulloch, head of feed sector, at trade group, Agricultural Industries Confederation (AIC), told us the rejection of the deal by the House of Commons last night [March 12] adds further to the lack of clarity over our future trading arrangements with the EU.
"Feed businesses are united in their call for some much needed certainty and clarity in order to plan effectively for the future."
Meanwhile, the director of Northern Ireland based, W&R Barnett, an international feed and grain trading firm, has indicated politicians were not engaging with companies over Brexit, according to an article in the Belfast Telegraph.
W&R Barnett CEO and MD, William Barnett, said Brexit planning was taking place and that was incurring “hundreds of thousands of pounds in additional costs, plus millions in additional working capital".
"Ultimately, in the context of our business, these costs are not in themselves a challenge. More significant would be the very significant diversion of management resources into contingency planning from actual business management/growth."
Belfast-based W&R Barnett supplies bulk liquid storage facilities to UK industry and owns businesses including animal feed giant John Thompson & Sons. It also does business elsewhere in Europe, and in Asia and Central America.
Barnett said the company was building stocks above normal levels in some sensitive raw materials, but was not engaged in “significant stockpiling”.
UK business leaders dismayed at turn of events
UK business leaders were left frustrated last night. Carolyn Fairbairn, director general of the CBI, following last night’s rejection of May’s deal, said:
“Enough is enough. This must be the last day of failed politics. A new approach is needed by all parties. Jobs and livelihoods depend on it. Extending Article 50 to close the door on a March no-deal is now urgent. It should be as short as realistically possible and backed by a clear plan.
“Conservatives must consign their red lines to history, while Labour must come to the table with a genuine commitment to solutions. It’s time for Parliament to stop this circus.”
Adam Marshall, director general of the British Chambers of Commerce, said businesses were not ready to face the consequences of a messy and disorderly exit from the EU.