ICOS Brexit Briefing

The Copa Cogeca Brexit Task Force met yesterday, 26 October, with the Commission’s negotiation team. The meeting, chaired by ICOS’s Alo Duffy, focused on customs implications for the agri-food sector, from the day the UK leaves the single market and customs union, as well as the ongoing work on a WTO level, regarding import quotas. The team advised that businesses must prepare for a no-deal scenario and be ready for a new trading relationship on 29 March 2019.

Responding to concerns raised over the insufficient EU and UK customs infrastructure and capacity to cope with the increase in trade using these procedures following the UK’s departure, the Commission stated they will be hosting a technical seminar for Member States in the coming weeks, to help them prepare for the needed expansion of both physical infrastructure and personal. In addition it was stated that the EU’s customs IT systems would be further developed in preparation for the increased requirements. With regard to the particular situation of the Northern Irish-Irish border, the Commission highlighted that they are in the process of exploring solutions to avoid any physical infrastructure.

This meeting follows the 5^th round of negotiations, from 9-12 October, which Michel Barnier stated ended in a “very disturbing state of deadlock” over the financial bill, leading to an agreement by EU-27 leaders last Friday, 20^th October, that “sufficient progress” has not yet been made on the three phase one issues (the financial bill, citizen’s rights and Northern Ireland) and therefore negotiations will not yet begin on the future relationship. A new deadline has been set for the next Council summit in December and in the meantime the EU-27 agreed to begin internal preparations for negotiations on transitional arrangements, so that they would be ready to begin talks with the UK as soon as possible.

Speaking to Copa Cogeca, yesterday, the Commission stated that a transitional agreement which maintained UK membership the single market and customs union would necessitate that they fulfil all of the obligations of membership (including for example maintaining jurisdiction of the European Court of Justice and payments to the EU budget) and that it would be applied across all sectors.

Information was also provided on the joint proposal by EU and UK to World Trade Organisation (WTO) countries, for the creation of the UK’s new trade schedule and the adjustment of the EU’s. The UK has agreed that it will replicated what it can of the EU’s trade schedule, and what cannot be replicated, including import Tariff Rate Quotas (TRQs) will be split. TRQs are used to allow limited access to imports at a preferential or zero tariff rates. The EU and UK are proposing that full TRQs be split (even if they are at the minute only partially used) following a formula calculated on the basis of trade flows over a 3-year period (2013-2016). A coalition of WTO countries, including the United States, New Zealand and Brazil, have however already warned that they were prepared to challenge any outcome that would reduce their current levels of market access for agri-food products. The Commission are now in discussions with these countries to ensure they are not left “worse off”, and highlighted to Copa Cogeca that this is just a first step, as discussions regarding TRQs agreed within Free Trade Agreements might also need to take place in future.

The Draft 2018 Budget, announced on 10 October, included three very welcome initiatives to respond to Brexit. These initiatives are very much in line with calls made by ICOS and others in the sector to support agri-food businesses, including:
- A €300m Brexit loan scheme for SME’s
- €25m in funding for the Department of Agriculture, Food and the Marine “to provide for the development of further Brexit-response loans for the agri-food industry”.
- And an additional €4.5m in funding for Bord Bia in 2018 to assist in promotional and developmental work for Irish food overseas.

For any questions, comments or to be added to the mailing list for future Brexit Briefings, please find my contact details below.

Alison Graham

European Affairs Executive

Irish Co-operative Organisation Society Ltd

Tel: +32 22 31 06 85

Fax: +32 22 31 06 98

Mobile: +32 487 64 86 80

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