Farm View: Predictions of likely events this month as Brexit looms

File photo

It’s a month to Brexit, but the UK and EU armies of negotiators are already camped on the cliff edge.

Last week, the UK threatened to push the Irish agri-food industry over the edge, with a promise of no-deal tariffs on our €4.5bn annual food exports to the UK, which could amount to a 40% import tax on them.

Ireland bravely fought back, pointing out that most of the 804 million litres of milk from Northern Ireland which is processed in the South may have nowhere to go after a no-deal Brexit crash-out.

Brave words, but Ireland’s small, trade-dependent economy relies entirely on EU backing if Brexit gets messy.

Next to be threatened in the cliff edge negotiations will probably be our estimated €21bn of annual export goods, including food shipments, relying on the landbridge route through the UK to get to the continental EU.

We can expect plenty more shock headlines, as the EU-UK divorce proceedings get less civilised, and the prospect nears of free trade between the EU and UK ending at midnight on March 29.

There will be warnings of bankrupt airlines, due to flights between the UK and continental Europe being grounded (about 370,000 passengers per day fly between the UK and the EU27).

Queues of trucks could stretch for miles on clogged roads to ports.

The UK will be threatened with a salad blockade, because 70-90% of the lettuces, tomatoes, and soft fruit it imports in the spring comes from the EU.

This fresh produce can’t be stockpiled; anyway, all of the UK’s frozen and chilled storage is already full of stockpiled items.

As for trade in the other direction, fears will be racked up, justifiably in some cases, of vital medical supplies being held up, endangering patients in the UK and the EU.

We will probably get to hear of the British navy gearing up to stop EU vessels illegally fishing if British waters are closed off by Brexit.

As the days go by, more industries will threaten to move manufacturing out of the UK, following decisions by Honda, Nissan, and Jaguar Land Rover, Ford, in the car industry alone.

Retaliation

British industries based in EU-27 countries may retaliate.

Airbus — which employs 14,000 people in Britain — will ramp up its warnings that a no-deal Brexit would turn out to be “catastrophic” for it, and that “there is no such thing as a managed ‘no-deal’”.

British regional airline flybmi has already blamed Brexit in part for its bankruptcy.

Multi-billion euro financial contracts for EU firms servicing UK customers (and vice versa), from insurance to loans and derivatives, will become bargaining chips in the cliff edge negotiations.

Down-to-the-wire negotiations look likely, regardless of the huge damage the resulting uncertainty will do to businesses.

For example, the agri-food industry here in its dealings with the UK will have to go into a day-to-day operating mode, with all future plans suspended.

As March goes by, people in every business depending on trade will be unable to safely commit to UK contracts extending into April.

If negotiations get really heated, then it will be pointed out the UK crashing out could leave it without an internationally approved nuclear inspection system, and other countries would then not be able to send nuclear materials or components for the UK’s eight nuclear stations — which currently generate around 20% of the UK’s total electricity.

Japanese manufacturer Hitachi has already announced it will stop construction of a nuclear power station in Wales, which was expected to provide about 6% of Britain’s electricity.

Brinkmanship is inevitable, but there’s so much at stake that the smart money is on the negotiators coming up with some kind of deal.

But that depends on someone backing away from the cliff edge, or the sides agreeing some kind of compromise in their deadlock over issues such as the withdrawal agreement and the Irish backstop.

More on this topic

146-acre West Cork farm offers varied possibilities

Teams from 13 countries to take part in European Ploughing Championships in Wexford

Cormac MacConnell: It’s an ill wind that blows no good...

How Article 50 filibuster could plunge us into no-deal smugglers’ paradise

More in this Section

Turning wood into food to solve protein shortage

Karen Walsh: Appeal Court verdict of interest for Irish farming families

Optimising our inshore fisheries

Dispute between farmer and wind farm company takes a twist


Lifestyle

25 years on: Do you recall where you were when you heard the news of Kurt Cobain's death?

MOMMY DEAREST: The portrayal of Irish mothers on screen

Making Cents: Consumers have more options with An Post

More From The Irish Examiner