[PDF] - Brexit and Irish Agri-Food Trade Prof Michael Wallace University PDF Document

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Brexit and Irish Agri-Food Trade

Prof Michael Wallace University College Dublin School of Agriculture & Food Science

Agricultural Science Association Annual Conference 7 September 2018

Context

Ireland’s agri-food exporting success
Shaped by:

Globalisation Frictionless EU trade environment

Threats:
Increasing protectionism
Brexit

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Challenges

Exposure to UK
Tariffs?
Non-Tariff barriers
Sterling exchange rate
Longer-term UK policy

Key Challenges: Exposure to UK

Belgium Cyprus Denmark France Germany Greece Ireland Italy Netherlands Poland Portugal 5 10 15 20 25 30 35 0.5 1 1.5 2 2.5 3 3.5 4

Proportional Exposure (%) Size Exposure (%)

Source: UNCTAD-Stat Adapted from Smith et al. (2018)

Food & Beverage Exports, 2017

𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑈𝑝𝑢𝑏𝑚 𝑑𝑝𝑣𝑜𝑢𝑠𝑧 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑥𝑝𝑠𝑚𝑒 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑥𝑝𝑠𝑚𝑒

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Beef Exports: Exposure to UK Market (2017)

Ireland Netherlands Poland 10 20 30 40 50 60 1 2 3 4 5 6 7

Proportional Exposure (%) Size Exposure (%)

𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑈𝑝𝑢𝑏𝑚 𝑑𝑝𝑣𝑜𝑢𝑠𝑧 𝐺𝑝𝑝𝑒&𝐸𝑠𝑗𝑜𝑙 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑥𝑝𝑠𝑚𝑒

Data Source: UNCTAD-Stat

Dairy Exports: Exposure to UK Market (2017)

Data Source: UNCTAD-Stat

Belgium Denmark France Germany Greece Ireland Italy Netherlands Spain

5 10 15 20 25 30 35

1 2 3 4 5 6

Proportional Exposure (%) Size Exposure (%)

𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑈𝑝𝑢𝑏𝑚 𝑑𝑝𝑣𝑜𝑢𝑠𝑧 𝐺𝑝𝑝𝑒&𝐸𝑠𝑗𝑜𝑙 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑉𝐿 𝑇𝑓𝑑𝑢𝑝𝑠𝑡 𝑓𝑦𝑞𝑝𝑠𝑢𝑡 𝑢𝑝 𝑥𝑝𝑠𝑚𝑒

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0% 20% 40% 60% 80% 100% 120%

020110 CARCASES, FRESH OR CHILLED 020130 FRESH OR CHILLED, BONELESS 020230 FROZEN, BONELESS 020422 FRESH OR CHILLED, WITH BONE IN 020423 FRESH OR CHILLED, BONELESS 020443 FROZEN, BONELESS 020312 FRESH OR CHILLED HAMS, SHOULDERS 020319 FRESH OR CHILLED, OTHER CUTS 020329 FROZEN, OTHER CUTS 040120 MILK OF FAT > 1% BUT <= 6% 040210 SKIMMED MILK POWDER 040221 WHOLE MILK POWDER 040310 YOGURT 040510 BUTTER 040690 CHEDDAR CHEESE Beef Sheep meat Pig meat Dairy

Key Challenges: No Deal => Tariffs?

EU MFN Bound Tariffs (WTO) Ad valorem equivalent at 2017 prices

Sources: Eurostat, TARIC

* * * *

5 10 15 20

Mach, equip, energy Chem, rubber, plastic products Other manufacturing Motor vehicles & parts Food & Drink Agriculture

Trade Facilitation Costs %

EEA-type FTA-type WTO

Key Challenges: Non-Tariff Barriers (NTBs) => Costs

Tariff Equivalent

Reflect barriers, e.g. customs costs, other border costs and regulatory costs

Source: House of Commons Exiting the EU Committee (2018) Cost of vet checks and port clearance for meat approx.

€625

per consignment (UECBV, 2018)

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Key Challenges: Other Factors

Managing Sterling risk
Sustaining integrated IRL-UK supply chains?
Dis-integration? => impacts on efficiency, duplication/investment
Evolution of UK’s trade and regulatory policy in longer-term…
Competition
Trust? – will any agreement on alignment be maintained by UK?

What response?

Brexit unequivocally negative - but disruption may create
pportunities for some?
Defending ‘preferred’ supplier position in UK
Consumer trust, quality/provenance, long-established relationships, geographic

proximity

Market diversification: market demand drivers globally
Key growth opportunities in non-EU markets (esp. Asia)
Proactive, cohesive national strategy: influence & preparedness
Safeguarding? e.g. EU assurance on ‘exceptional measures’ in event of chaotic

Brexit?