Even quotas part of Brexit not agreed yet

by Stephen Cadogan

The UK has agreed in Brexit talks to take over part of the current quota arrangements with non-EU countries for certain agricultural products.

The UK said it will take a portion corresponding to its consumption of those quotas over the last three years.

However, even this relatively minor Brexit deal has run into trouble, with seven of the world’s biggest food exporters (the US, Brazil, Argentina, Canada, New Zealand, Uruguay and Thailand) formally rejecting it.

Therefore, the remaining 27 EU states having to soak up the UK’s share of non-EU food import quotas has not yet been ruled out.

For example, New Zealand is allowed to export up to 230,000 tonnes of sheep and goat meat per year to the EU, and the UK consumes up to 40% of this quota.

Unless the UK continues to take 40%, EU-27 sheepmeat markets will be over-supplied.

As for Brexit overall, it now looks much more difficult to achieve smoothly during the limited time available, opening the way for the “cliff edge”, because it will be too late to secure the agreement of the European Parliament before March 29, 2019, when the two-year Brexit negotiating period expires.

Unless the EU-27 and the UK “stop the clock”, the UK would leave the EU without an agreement, and business leaders warn this would bring chaos at British, Irish and mainland European ports due to checking of consignments, as well as suspension of air travel between the UK and the EU, and other major disruptions.

Despite prime minister Theresa May’s attempt in her speech in Italy on September 22 to relaunch negotiations on a better footing, the fourth round of Brexit negotiations in the last week of September brought little progress on issues under discussion such as citizens’ rights, the Irish border, and the UK’s exit bill.

Next, the Conservative Party conference confirmed that the cabinet remained divided on Brexit.

There was minimal progress during the fifth round of negotiations, on October 9-12.

However, European Council President Donald Tusk has stated that the EU does not anticipate a “no deal” scenario.

In contrast, reports put the proportion of British cabinet members believing that no agreement will be reached at 40-50%, and there is disagreement within the Conservative Party on whether funds should be set aside to plan for a Brexit “no deal”.

The UK’s hopes that the EU would open the second phase of Brexit talks, on the future UK-EU trade relationship, were dashed on October 3 by a European Parliament resolution stating that “sufficient progress” has not been made (in a 557 to 92 vote).

This was in line with the thinking of commission president Jean Claude Juncker and EU negotiator Michel Barnier.

December is seen as a make or break month for Brexit talks.

Mr Barnier has stated that there is significant political will in the EU to reach “sufficient progress.”

And UK financial and manufacturing businesses are understood to have made it clear to their government that they cannot wait much longer, before they activate contingency plans for a “no deal” Brexit.

If sufficient progress is not made in December, Brexit talks are thought more likely than not to fail.

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