Free trade deal critical for cross-border food

The chair of a major food lobby says it's vital the British Government secures a suite of free trade deals post-Brexit to protect massive levels of cross-border trade from hugely damaging tariffs.

Wednesday, 28th December 2016, 8:00 pm
Updated Thursday, 29th December 2016, 3:12 pm

Declan Billington, Chair of the Northern Ireland Food and Drink Association (NIFDA), recently put meat on the bones of what a hard-Brexit could mean for a £4.6 billion industry, 30 per cent of which would be subject to international trade deals.

Mr. Billington said people are rightly concerned about the potential impact of a hardening land border but warned the implications for cross-border trade are an even bigger issue.

“With a trade agreement, you can put mechanisms in place to deal with border issues; without a trade agreement, that will be much harder. We sell a quarter of our milk to the South. We sell 36 per cent of our pigs to the South.

“We sell sheep to the South. Similar numbers of pigs come North. Some 50 per cent of the flour that we produce in Northern Ireland goes to the South. If we do not get access to the single market and hit these tariff walls, we cannot compete.

“We will have assets on one side of the border that are subscale because they do not have the product from the other side of the border. It cuts both ways. It is truly an all-island market.”

Briefing members of the Stormont Agriculture Committee on the NIFDA’s, ‘Brexit: Challenges and Opportunities for Northern Ireland Food and Drink’ document, before Stormont rose for Christmas, Mr. Billington explained how inaccess to favourable international trade deals, which Northern Ireland enjoys due to its membership of the EU, will severely damage the food and drink sector both north and south.

For instance, southern cheese, made from northern milk, could not be exported outside the EU tariff-free because it would not be of European origin.

“Right now, milk going South can be processed into cheese, which is exported around the world through trade agreements.

“Post Brexit, the milk could not go South to be made into cheese for export around the world because that milk would not be of European origin. Therefore, it would not be allowed into a product that sought to use a European trade deal.

“There is a rule that if, for example, you grow an animal in Northern Ireland and it is outside the European Union and there are tariffs, you cannot send it across to be processed and exported to another country because it is not of European origin and is, therefore, subject to tariffs.”

And the sale of offal and hides to European processors for onward export to growth markets in Asia would be cut off, hitting farmers and processors badly.

“If we talk about world trade, the statistics say that Northern Ireland has about £140 million of export trade.

“We believe that that is highly understated. The offal products from our industry are often consolidated elsewhere in Europe and then sold on to Asia.

“The final consumer is outside Europe, but the statistics say that the consumer is inside Europe.

“Therefore, the trade deals that we have with the rest of the world - 53 of them - are vital for selling bits of the animal, particularly the offal.

“The offal and the hide are worth probably £100 or £120 per animal. If we lose access to the markets that we put them through, you lose the ability to pay that £120 back to the farmer. The value might be small, but the impact could be large.”