Minister for Agriculture Michael Creed has admitted that the UK’s plans for tariffs are “potentially a disaster”.
He said it was illogical that the UK could now offer a bespoke agreement for Northern Ireland.
“It is interesting in the context of what is published today the UK contemplating bespoke arrangements for Northern Ireland, if we had the bespoke arrangements that are in the withdrawal agreement we would avoid a hard border,” he told RTE radio’s Today with Sean O’Rourke show.
“This is the scenario (tariffs) in the event of a no-deal Brexit whereas the House of Commons rejected yesterday by a substantial majority the withdrawal agreement with all its revisions. What the House of Commons will vote on today is to take off the agenda a no-deal scenario and if a no-deal scenario is taken off the agenda then obviously this tariff regime would not apply.”
The Minister explained that some months ago his department carried out an overall scenario on full WTO tariffs being applied to the Irish offering in the UK market.
He said: “That would have added €1.7bn onto exports that we put into the UK market and that would consequently have had significant consequences for the producer and processors here, but also for food inflation in the UK.
“What we have today is a bespoke tariff regime that the UK has published, it is not the full WTO tariff, they have been selective, and understandably so, self-serving in terms of what they want to achieve.
“We're involved now in a very detailed exercise of analysis of what the implications are, but it's not a pretty picture, there's no point in sugar-coating this.
“It’s important to say that this is in the event of a no-deal scenario and we’re not there yet.”
The Minister warned that the introduction of tariffs would lead to “significant food inflation” in the UK.
Mr Creed also said that tariffs would not be the issue that would lead to a hard border, they were a transaction tax that did not require a border infrastructure.
The balance of advantage for Ireland was to remain in the single market and the EU.
“We’re not planning for a hard border and will not countenance a hard border,” he concluded.
The CEO of the Irish Exporters Association Simon McKeever has said Irish exporters should take the UK’s new tariff proposals “very seriously.”
He told RTE radio’s Morning Ireland that under the new plans the UK has allowed tariff-free access for 87% of goods instead of the previous 80%, however, this is still hitting a lot of the main Irish goods going directly into the UK, like dairy products such as butter.
Mr McKeever said capacity issues going into the North may arise and there could be “creeping checks” going across the border.
He went on to warn that Irish goods could become less competitive and be substituted by cheap foods from the EU or the rest of the world, such as beef from South America and chicken from North America.
Mr McKeever said it is still unclear if the UK is allowed to have a preferential rate for one part of the EU.