Q&A: Bord Bia
It is unknown what type of tariff system may be put in place after the exit talks. A number of trade models are cited as potentials.

Bord Bia has been quick to respond to calls from its client companies to keep them appraised of updates and analysis of the choices available to Irish exporters following Britain’s vote to exit the European Union.

A week ago, Bord Bia brought together more than 180 Irish food and drink exporters along with experts from the UK food retail market for a briefing in Dublin to share information on the post-Brexit trading landscape.

The national food marketing body outlined the measures it would implement to support companies as they navigate a new trading environment.

Bord Bia says it will work to assist Irish companies maintain their competitiveness through providing advice on managing volatility impacts, provision of consumer and market insight, deepening customer engagement and extending market reach.

Below are some of the main concerns being expressed by Irish food and drink exporters, along with Bord Bia’s responses.

What does the weakening of sterling mean for Irish food and drink companies?

The leave result has led to significant uncertainty and a weakening in sterling. Since the Brexit referendum outcome sterling has depreciated about 10% versus the euro. 

The euro reached its highest level since April 2014, at 83.8p on June 27 and hit a 31-year-low against the dollar, trading to a low of $1.312 at one point. 

It is expected that exchange rates will remain particularly volatile as political and economic uncertainties continue for the foreseeable future. AIB has forecast euro/sterling could reach 84p to 86p in the coming months.

How does Bord Bia plan to support Irish companies exporting to the UK in light of Brexit?

Bord Bia has conducted a survey with exporting companies and received feedback on their concerns and requests for assistance. 

Informed by this we have organised a series of seminars, workshops and trade events to assist Irish companies to remain competitive in the UK. In addition, Bord Bia will continue with its market-diversification programme. 

Bord Bia through the London office will continue to work closely with trade partners in the UK and share information with client companies. To discuss the available options for your business please contact your sector manager.

Will some form of bilateral agreement be negotiated?

The primary objective of the Irish government is to protect and advance Ireland’s national interests. Under the terms of Article 50 of the Lisbon Treaty, withdrawal negotiations will be concluded between the UK government and the EU by the European Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

The scope for bilateral arrangements will emerge in these and in subsequent negotiations between the EU and the UK.

However, the Government has also stated a desire to maintain and build on the strength of the existing bilateral relations with the UK government, although in many cases they will have to be managed through EU-UK frameworks.

What are the implications for companies trading with Northern Ireland?

There is no change at the border. Until the UK formally withdraws from the EU, Northern Ireland will remain a full member, with all of its existing rights and obligations. 

Businesses can continue to trade as normal and people can continue to travel as normal between Ireland, Northern Ireland and the rest of the UK.

The Irish government has stated that, during any negotiations, it would actively seek to avoid the introduction of any new measures that could negatively impact on the Border region, either North or South.

Will tariffs be introduced immediately?

There will be no introduction of tariffs or regulatory changes to Irish or EU goods and services entering the UK until the UK actually leaves the EU. 

The triggering of Article 50 of the Lisbon Treaty by the UK government will start the two-year negotiation process for UK withdrawal from the EU, during which time all EU laws continue to apply. 

Any extension to the two-year negotiation period must be unanimously agreed by all member states.

What will that tariff system be, and when will it be introduced?

It is presently unknown what type of tariff system may be put in place; this will be determined by the exit negotiations. A number of trade models have been cited as potential arrangements:

1. European Free Trade Agreement (EFTA) — this would follow the model used by European Economic Area (EEA) countries Norway, Iceland and Lichtenstein.

2. EU Free Trade Agreement (EUFTA) plus bilateral treaties on individual single market issues similar to Switzerland.

3. Customs union with the European Union.

4. International Free Trade Agreements — TTIP with the US and CETA with Canada.

5. World Trade Organisation (WTO) Option — no Free Trade Agreement — WTO most-favoured nations tariffs apply to exports from both partners.

www.bordbia.ie 

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