Jeremy's Blog 11/09/20: Deal or No-deal?
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 10th September 2020.
We are now 16 weeks to the end of the EU transition period. If a deal is to be in place for 1st January, it needs substantial agreement by mid-October. This week has highlighted the possibility that the negotiating mandates preclude a deal acceptable to both the UK and the EU. Aside from fisheries, the major problems are understood to lie around the relationship between future UK rules and evolving EU ones, notably around state aid for business (with the Government anxious about the technology sector). That could be overcome by political decisions in the next few days and does not exclude a deal next year or later. Meanwhile, the Government is said to have modelled the situation where no deal coincides with a Covid peak and flooding.
Separately, issues with the agreed framework of the Northern Ireland Protocol include:
- the paperwork and potential tariffs for goods moving from Great Britain to Northern Ireland – 750,000 tonnes of feed grain, second-hand machinery from auctions and livestock medicines.
- how “unfettered access” to Great Britain for goods from Northern Ireland might work while ensuring that the province is not a back door from the EU to the UK
- the interaction between the rules for Northern Ireland and UK state aid.
The Government has now controversially proposed powers to help manage some of the issues.
No deal means tariffs: for wheat, £79/t on imports and €95/t on exports to the EU. With a poor harvest but good milling quality, more barley, access to maize and some retention of flour that would go to Ireland, this might be less significant than it looks but some export trade might be brought forward. Measures appear to be in mind for disruption to the lamb trade.
Previous deadlines saw much no deal planning. That will not mean all issues have been identified or managed. As before, it seems prudent for a farm or other business to think, for January and then the first quarter of 2021 what it would feel silly not to have done, from spare parts to sales. Deal or not, tariffs or not, those trading with the EU will need to manage customs and other paperwork while issues may range from heat-treated pallets to containers with several consignments.
It would be helpful for CAAV work with Government to hear from members where their work highlights possible practical challenges to business continuity.