‘A soft Brexit will be incredibly difficult to achieve’

A soft Brexit will be incredibly difficult to achieve, economist Jim Power told a meeting of the Oireachtas Joint Committee on Agriculture last week.

If a soft Brexit is the result of the trading negotiations, then the UK will have access to EU markets and it will make a contribution to the EU budget, he said.

“If [Prime Minister] Theresa May said that the UK has agreed to access to the single market it will have to accept the free movement of people, which will be a hard sell.

“Theresa May has committed to invoking Article 50 by March 2017 and once it is invoked it will set the ball rolling for negotiations post-Brexit.

“There will be a two-year negotiating period on trading relationships and if agreement is not reached the UK can apply for an extension period pending agreement by the other 27 Member States.

“If they do not agree to this then WTO trade agreements come into effect.”

Power said that every EU Member State will have its own vested interests and said that it’s important to remember that at EU level, they will make it as difficult as possible for the UK to leave the EU.

Meanwhile, the economist said that should the exit negotiations result in a hard Brexit, we will have a situation where the UK is not part of the EU customs union.

“There will be tariff quotas on trade. This will impact negatively on the UK and it would have to explore other markets.”

In excess of €1 billion could be knocked-off the value of exports, which Power said would be a serious hit to the agri-food sector.

“What the damage could be [to the sector] depends on the trading arrangement.

“If it is a hard Brexit and World Trade Organisation (WTO) rules apply, well I think that the damage will be in excess of €1 billion. It’s a very difficult number [that of the damage to the value of exports] to calculate.”

Power said that there are 5,200 items in the WTO trading arrangements and there are tariffs of between 30-50% on the agri-food sector within these arrangements.

“The highest of these are on beef and dairy commodities and could be in excess of 50%. If Britain leaves without a deal, tariffs of 30-50% could apply on food exports to the UK.”