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LAST SATURDAY, THE day after Britain finally left the EU, was the first anniversary of the EU-Japan trade deal coming into force.
According to the European Commission, in its first year the economic pact has led to boosts in exports of wine, dairy, meat and machinery. In Ireland, Bord Bia has been the EU’s partner in promoting EU beef in Japan.
When the Japan deal was signed, after years of negotiations, European officials were quick to herald the agreement as a significant victory while Brexit rumbled on in London and Brussels.
The deal with Japan may have taken years of negotiation, meanwhile the EU’s agreement in principle last year with the Mercosur – the trade bloc of Brazil, Argentina, Uruguay and Paraguay – took two decades.
Even after such a long negotiation period, the deal was met with fierce criticism as Irish farmers have protested that the deal will see cheaper South American beef products undercutting them.
This is the reality of trade talks and deal-making. They’re long, laborious and contentious with many variables at play. With Britain now out of the EU, the clock is ticking to get a post-Brexit trade deal agreed by the end of the year, before WTO rules kick in bringing significant tariffs for Ireland with them.
Hard graft
For every step forward like the EU-Canada agreement, there’s a knockback – such as the Belgian region of Wallonia wielding its opposition to that agreement.
This is the environment that the UK is entering now as a third country, but Prime Minister Boris Johnson is adamant that a deal with the EU can be struck by the end of 2020.
For critics of Johnson, this is fanciful. For Johnson, it’s an ambitious play to prove Brexit was worth it.
EU trade commissioner Phil Hogan said that the EU will set out its mandate for the talks by the end of February. Then the hard graft will begin.
The EU-UK talks have a unique bent as both sides are entering from positions where there are no pre-existing trade barriers and they are now about to put ones up.
Everything will be on the table from custom checks to fisheries, data transfers to police cooperation, meat and dairy to financial services and every nugget in between.
An early tiff has already emerged in Europe seeking access to British territorial waters for fishing.
The UK will be out of the single market and customs union so unlike non-EU members like Norway, it will not be beholden to any EU rules and foreign secretary Dominic Raab has said that the UK will not align with EU rules, which throws a spanner in the works from the off.
Michel Barnier has said that a deal for the UK where there are zero tariffs and quotas “won’t happen for nothing and without conditions”.
The UK is keen to secure a “Canada-style” deal which would see most tariffs dropped. That would be ideal for Johnson and co but what will the EU want in return?
Each member state can veto a deal and Ireland’s position on certain issues could change between now and when talks fully kick off. With Fine Gael trailing in the opinion polls ahead of this Saturday’s general election, Varadkar may not be the Taoiseach to helm Ireland into this tricky time.
Standards
There will be plenty of talk of a “level playing field” where the EU will expect the UK to share certain standards, such as policy on state aid, workers’ rights and environmental standards.
For Ireland, the risks are acute. Simon McKeever, chief executive of the Irish Exporters Association, told Fora that the agri-food sector is particularly at risk.
“There is a great fear that if the UK diverges away from the European Union on standards then what type of foodstuffs will it allow into the market? And what kind of a competitive threat is that for Ireland?” McKeever said.
Another issue relates to standards around state aid and foreign direct investment. When the UK is completely independent of the EU, it could alter standards to become more attractive to foreign direct investment and “that would be a threat to us as well”.
If a deal emerges from these talks, it will also have some influence on the trade deals the UK strikes elsewhere, especially with countries that already have existing deals or engagements with the EU.
“I think that a country that sits in some part of the world that is trying to do business with both the EU and the UK will want to see some kind of equivalence across standards and I think that will be challenging for the UK,” McKeever explained.
He added that the tight timeline for getting a deal done limits the scope of what can be achieved.
The EU will set its mandate at the end of this month and a deal will need to be reached by October to be ratified by the European Parliament by December. The reality is that the timeline is about eight months and Johnson has been resolute in saying he would not seek an extension.
“It’s condensed into a very short period and all the threats haven’t gone away,” McKeever said. “People will still need to be getting themselves ready for customs and all the paperwork that is going to take place. You can’t let up on this in any way, shape or form.”
If no arrangement is made by year’s end, the dreaded cliff-edge Brexit that we’ve heard so much about since 2016 will effectively come to pass.
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Written by Jonathan Keane and posted on Fora.ie
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There is a lot of scaremongering here too. The EU trades with many countries without recognised trade deals. Goods get bought and sold, flights still happen, money gets transferred. The UK will forge their own path from now. Those businesses wishing to sell into Europe will still manufacture at the required standard – as do countries who dont have a deal. Tariffs will apply on certain goods making them more expensive for the final consumer who may or may not buy that product as a result. I dont mean to belittle what needs to be done, merely point out that the sky wont fall in if it isn’t done by end of year.
@lambda sensor: Absolutely, trade deals are by their very nature “protectionist” by the two signaturies.
@lambda sensor: The Uk will be uncompetitive and they lose their biggest export market once the hard brexit happens at the end of 2020. This will damage the Uk economy significantly.
@Damian Moylan: I think that’s scaremongering tbh. Why exactly will they lose their biggest export market? Sure, tariffs may add a few cents to British produce but many products wont be that price sensitive and the impact is being completely oversold in my view.
Should banned South America beef import
@Brian Flavin: S American beef is coming to a shop near you soon! Thanks to the EU!
@Dom Layzell: you don’t have to buy it
BJ doesnt want a trade deal yet. 11 months to finish one when the average is 7 to 10 years? He knows they wont get anywhere near agreeing one, the EU know it also. BJ will then blame the EU. And he will then switch attention to America, despite not being told what to do by trump re Huawei 5G. BJ is too much a buffoon and career liar to have a master plan and continues to trip and fall at every hurdle. The EU Brexit negotiators screwed the UK as will every other country and trading bloc that the UK will have to deal with. Their negotiators are terrible and with up to 250 trade agreements to sign off … good luck the UK. Enjoy your “independence”.
@Paul Furey: You are 100% correct. No deal will happen at the end of 2020. It’s inevitable, the Tories want it. Let the vhips fall where they may as we can’t change it. Irish companies need to diverge to Eu markets to mitigate the damage.
Trade agreements take years, there are multiple political, legal and trade issues combined with multiple special interests in each country and sector.
The EU/Canada deal took over 5 years to negotiate with a 2 year activation period for what was a relativity straight forward and non controversial trade deal.
So this will take years if the UK goes for non alignment from the EU (which it has stated). There is a possibility of no agreement with the UK ending up as Americas bitch.
@ktsiwot: I think one way or another the UK will become America’s bitch
@smart cat: with Trump looking at a second term he will want to be seen as hard and in yielding
@smart cat: oh ya definitely, at the end of the day what does the U.K. actually produce…nothing
@RAYZ88: true! They have very little leverage and will never get a similar deal from anyone to the one that they had when in the EU. Despite BJs lies. Who would ever give the same deal a nation that only offers 15% of what it used to be part of.
@ktsiwot: The only reason trade deals take so long is down to the pace the EU moves at. Full of its own importance ruled by unelected buffoons trying to justify what they do. Is it any wonder the UK quit? The whole thing is nothing more than a giant con, set up in order for Germany and France to rule continental Europe.
@james dimaggio: I think u should research how long America Canada and Mexico took
@james dimaggio: The Uk decided to leave the Eu and they’re out. It is not incumbent on the Eu to offer a free trade agreement (FTA) to the Uk. The Eu will defend the interests of Eu member states.
Fresh from the recent divorce the UK feels empowered having in her eyes regained her own identity and freedom after years of allegedly living in an abusive relationship with the EU, but after spending the last week on a high, focused on all the possibilities of new mutually respectful relationships that lay ahead……
The reality the she is no longer the powerhouse she used to be, nor the object of desire that she once was, this will begin to hit home and with that the realisation that to negotiate anything, you need to have something to offer, that the other party wants or better still needs, if you hope to get a better deal, neither of which the UK now has to offer…
Pathetic hissy language from posters above. When we in ireland took Independence we did so knowing we would be the poorer for it, particularly due to Sinn Fein who fought tooth and nail against staying in the commonwealth. Well, we were poorer but we were independent and progressed.
Why are we in denial about the UK’s position ? They wanted out and will suffer the consequences.
@John Stretton: To say that Ireland’s independence and brexit are the same is obviously fake and incorrect.
Saying that hundreds of years of military domination, exploitation and ethnic cleansing by a bullying neighbour is in any way comparable to leaving a group of nations trying to achieve a lasting peace and prosperity, is ludicrous!
I have heard this opinion expressed by a number of British people over the last 3 years. It’s a false equivalence and an insult.
I guess this is the next thing we all have to become experts in then… yay
The Guardian reported that the Uk took its seat far away from Eu collegues and the Uk is planning to drop all tariffs on goods not made in the Uk. Example: fridges…so the Uk can import cheaper firidges from say South Korea than the Eu (Germany, Italy). Also the Uk plan is to drop all tariffs on components used to manufacture goods effectively making Uk goods than Eu manufactured products. The War with the Eu has already started. So we are looking at a 100% no deal scenario and tariffs between Eu and Uk.
@Damian Moylan: Its wto seat.
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