Tuesday, May 21, 2024

John Whelan: Fresh Brexit hurdles to hit Irish exporters this week

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Details of a new post-Brexit charge for food and plant imports from Ireland and the EU, released by the UK government earlier in the month, have been described as a “hammer blow” by agri-food exporters, leaving them with less than a month to prepare before the checks take effect.

The UK government outlined how much this post Brexit checks — delayed five times — will cost businesses importing produce from Ireland or the EU.

The fees, which will apply from April 30, range from £10 for “low risk” goods up to £145 for “mixed consignments”.

Also coming into force at the end of April are new “documentary and risk-based identity and physical checks” at the border. These will apply to medium-risk animal origin goods coming from Ireland and the EU.

The latest bureaucratic requirements and levy comes just a year since the UK and EU agreed the Windsor Framework, which set a new arrangement supposedly to smooth the trade flow between Britain and Northern Ireland.

A key part of the Framework, introduced in October 2023, enabled trusted traders to use a fast-track Green Lane, if the goods were for consumption in the UK, but carried an obligation to attach a “Not for EU”  label on each product.

The UK government has committed to introduce ‘Not for EU’ labelling across the whole of the UK, which must be displayed on a range of agri-food products, irrespective of whether they have been produced in Great Britain or imported from abroad.

While the UK does not levy tariffs on EU goods, the flat “common user charge” is meant to pay for the cost of veterinary and health inspections on animal and plant products. But the post Brexit regulations already incur inspection fees from animal and plant health agencies, port health authorities and customs authorities, which eventually will need to be paid somewhere in the Irish supply chain.

There is mounting evidence that the plethora of seemingly ever-changing and over complicated trading regulations, ultimately make the UK a less attractive nation to trade with, particularly for smaller businesses in Ireland.

These smaller exporters and importers are more likely to be hit hardest, as they use mixed consignments, where they often band together and share a container or lorry.

The stagnating nature of Ireland’s agri-food trade with the UK since pre-Brexit days, offers a striking indication of damage done by the 2016 Brexit decision. It has impacted the largest single destination for Irish food and horticultural products, but also hitting a wide range of UK food producers who saw Ireland as an extension of their home market.

The bigger losers in the post Brexit period have been the UK food producers who have seen their sales to Ireland fall whereas in 2015 the UK provided us with 42% of our food imports, in 2023 the UK producers only supplied a quarter of our food needs, representing a potential loss to them of approximately €1.7bn in sales annually.

The Labour party, which polls suggest will be elected as the next UK government later this year, have committed to negotiating a fresh veterinary agreement with the EU as part of the party’s stated promise to re-engage with Europe, although staying outside the single market.

According to a joint paper released by the University of Bristol and Ason University, a deal to harmonise veterinary standards between the UK and the EU could boost the UK’s agrifood export sales by 22%.

An early deal could be on the cards as the UK have not moved far from the EU veterinary standards.

  • John Whelan is a leading expert on Irish trade

   

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