As long as the anti-commercial production culture remains at Defra, farmers will be unlikely to receive adequate support in the event of a no-deal Brexit, says Norman Bagley, head of policy at the Association of Independent Meat Suppliers (AIMS).
Well the cat is among the proverbial pigeons now, with Boris Johnson saying we’re leaving the EU at the end of October, come what may, do or die – should he become our next PM.
Let’s explore what this might mean in practice.
There are two distinct elements in my view. First the lawyers and trade wonks views, and secondly, the politics of the whole issue.
Assuming we leave on October 31 with no deal, what have we got?
Will the EU charge tariffs in a no-deal scenario? Yes.
Would UK retaliate? Left to Boris, probably. That then becomes a zero-sum game until sense prevails, perhaps.
The trade wonk options in a no-deal scenario go roughly like this:
1. Article XXIV of the General Agreement on Tariffs and Trade (GATT). Bojo and some others believe Article 24 gives grounds for allowing UK to trade with the EU without tariffs for up to ten years while negotiations on a free trade agreement take place.
Others think it is predicated on having an agreement, which if we leave without a deal, we don’t have.
The situation then would be Article 1 of GATT applies, whereby the UK could unilaterally continue to apply zero tariffs, but would have to do so in non-discriminatory manner for all countries, whether EU or non EU.
All other things being equal, and to comply with World Trade Organisation (WTO) rules, the EU is obliged to apply the same tariffs to the UK as it does for other countries with which it doesn’t have a preferential agreement or TRQ.
2. Both sides continue to apply zero tariffs, against WTO rules. The EU could decide tariffs are more damaging than upsetting the WTO, as disputes take years to settle and in that time the EU and UK could sort a free trade agreement and the problem goes away.
But would the EU look at its global trade and decide they’ll have to take the hit and refuse to apply tariffs? This is a long shot. And it gets even more messy if we’ve threatened not to pay the £39 billion divorce bill, so this is an unlikely outcome.
3. Reaching a withdrawal agreement. This would allow the UK and EU to continue trading on current terms, even though we’d be a third country during the implementation period.
This agreement allows the EU to apply GATT Article 24, and gives both sides scope to extend some or all aspects of the withdrawal agreement, if, for example, it is clear a permanent trade agreement was achievable.
Some no-dealers have overlooked this point thus far.
So those are the trade wonkish views. Now the politics.
I have always believed Ireland is the key.
In the face of hugely damaging tariffs, would the EU back the Irish industry financially? Probably, yes.
Would the UK reciprocate in a no-deal scenario with its own tariffs, and support its industry financially too?
Scotland and Wales would be likely to if they can find the money, but Defra?
At the Royal Highland Show last week, Scottish Rural Economy Secretary Fergus Ewing said he wanted the UK Government to match the €100m package promised to Irish beef farmers by the EU.
Defra’s response? Silence.
My views on the anti-commercial production blob in Defra haven’t changed, so unless the new Minister Robert Goodwill can change a long-held culture, it doesn’t look good.
Unless you believe in fairies of course.
Norman can be found tweeting at @normanbagley1