Brexit Bites, 9 October 2017

Oct 09, 2017

The past week has seen a series of leaked memos exploring the significant costs of Brexit for Ireland as well as throwing out ideas on an all-island trade policy for agri-food.  In other developments, the fifth round of Brexit negotiations starts today in Brussels while the UK and EU have reportedly agreed draft WTO quotas should trade talks fail.

Revenue report explores impact of Brexit for Ireland

An unpublished internal report prepared by Revenue and seen by RTÉ news is reported as detailing the huge impact Brexit will have on Ireland’s customs and trading infrastructure.  The message is that updating Ireland’s customs infrastructure will take significant time and resources given the level of trade between Ireland and the UK. 

It’s reported that Revenue has set out how Ireland’s ports and airports will face significant increases in paperwork, space requirements for customs clearance and staffing in order to man a border between the UK and Ireland.  The report also warns of the huge increase in administration for traders when dealing with customs and also highlights the costs of these measures.

The report has apparently found that an open border between Northern Ireland and the Republic would not work from a customs perspective and with 13,000 commercial vehicles crossing the border every day it would be naïve to think a unique arrangement could be found.

According to Revenue the report was prepared in September 2016 (before Article 50 was triggered) and was an “early technical consideration of possible administrative implications post Brexit.” The Revenue spokesperson told Chartered Accountants Ireland that Revenue routinely support the decision making process by compiling reports, statistical data and briefing materials.   Revenue highlighted the opening remarks of the Revenue Chairman, Niall Cody to an Oireachtas Committee in May, a hearing to which Chartered Accountants Ireland and member firm BDO also contributed.

All-island agri-food trade?

RTE reported last week on the contents of a memo prepared by the European Commission which proposes that trade in agri-food could be done on an all-Ireland basis post Brexit.  The memo entitled “Brexit and the border between Ireland and the UK” suggests that such a model would be appropriate to facilitate freer trade on the island and cites the structure as being particularly beneficial for the dairy and beef sectors.

The memo suggests however that Northern Ireland would have to remain fully compliant with EU animal health and food safety rules and therefore checks would need to take place at Northern Ireland’s ports for goods coming in from mainland UK.

The memo reportedly proposes that the UK as a whole could be included in the plans but notes that EU approval would be required.  The note also comments on the risks for Ireland if there were any outbreaks of animal disease or issues with food safety in the UK.  If controls between Ireland and Northern Ireland were found to contribute to such issues, among other issues, there would be a risk that Irish products could be banned from the EU.  

While not apparent how border checks between Northern Ireland and mainland UK would be received both sides of the border, Minister for Agriculture Michael Creed was quoted as saying he was “not alarmed” by the memo last week.

WTO quotas agreed

The UK and EU are reported as having struck a preliminary agreement on dividing up World Trade Organisation (WTO) quotas. Should no deal be reached on trading between the EU and the UK, trade is likely to default to operating under WTO trading rules.

Dividing up of quotas of products that are imported into the EU from third countries is a complex process and can cause more headaches than tariffs on imports. It’s expected that the proposed deal will not expand the overall quotas or market access. This is despite calls from countries outside the EU for this to happen in order to increase their market access to EU and UK.

Brexit Shorts

  • Read the programme for the fifth round of negotiations
  • Brexit uncertainty reportedly causes a fall in construction activity in UK
  • EU negotiator Michel Barnier says EU will not pay for the UK’s Brexit
  • UK banks call for transition deal by Christmas

Read all of our Brexit updates on the dedicated Brexit section of our website.