Northern Ireland farmers call for five-year transition after Brexit
Beef farmers in Northern Ireland have called for a five-year transition period after Brexit, putting pressure on the Democratic Unionist party, on whose votes Theresa May’s government depends for a parliamentary majority.
The beef industry body for the region fears huge losses from any switch to World Trade Organisation rules after Brexit, saying a transition much longer than the two years offered by the British premier would be required to minimise disruption.
A report for the Livestock and Meat Commission, a non-departmental public body funded by an industry levy, expressed deep concern about declining farm profits under WTO rules, particularly when combined with reduced farm subsidies.
“The most viable solution for safeguarding the future of the industry is not only a UK-EU post-Brexit comprehensive free-trade agreement, but until then to have a five-year transition period with a midway review, to avoid an interim deal simply being a stay of execution for the industry,” said Ian Stevenson, chief executive of the commission.
Many of Northern Ireland’s beef and sheep farmers are DUP supporters and fear major upheaval to their annual £1.1bn of combined revenues if Brexit is botched.
A study by consultants at the Andersons Centre and Oxford Economics found serious drawbacks for Northern Irish farmers under two WTO trading options, noting that tariffs on meat sales range from 40 per cent to around 100 per cent. One option is a unilateral “open-door” policy in which the UK cut tariffs on imports from major agricultural producers without any reciprocal agreements in place. Output would drop 21 per cent in this event, the study found.
“The viability of beef and sheep farming across large swaths of Northern Ireland would be seriously threatened, with grave consequences for the wider Northern Irish rural economy.”
Another option is a “WTO equivalence” policy in which the UK and EU impose reciprocal import tariffs based on the EU common external tariff and mutual recognition of veterinary standards. “Whilst output could rise marginally in the short-run (as domestic consumption displaced EU imports), gains would be eroded by declining consumption in the longer-term due to higher prices, and exports to the EU would still fall by over 90 per cent,” the study said.
The livestock commission said the UK should remain an interim member of the EU single market and customs union during a five-year transition, with a midway review to examine whether enough progress was being made to facilitate frictionless cross-border trade.
The avoidance of a hard border between Northern Ireland and the Republic of Ireland is a priority in Brexit talks for London, Dublin and Brussels. As a last resort, the livestock commission said a “Cyprus-type model” for cross-border trade should be considered if WTO trading came to pass.
“There are special rules regarding the trade of goods between the southern half [of Cyprus] and the Turkish Republic of Northern Cyprus. However, the report also notes that whilst a Cyprus-type model could help to facilitate trade reasonably close to existing levels, potential obstacles remain.