Formal agreement on the Brexit divorce terms has now been reached by the UK and the EU.
Abi Kay explains what it means for farmers...
EU Commission President Jean-Claude Juncker has this morning announced Brexit negotiators have managed to make ‘sufficient progress’ on the three key issues surrounding the UK’s divorce from the EU: the Irish border, citizens’ rights and money, meaning talks can move on to trade.
But what does the agreement mean for farmers? Let’s take a look...
Implications of the Irish border agreement
On Monday, hopes of clinching a divorce deal were dashed after the Democratic Unionist Party (DUP) objected to a draft text which said there would be ‘no regulatory divergence’ on the island of Ireland.
This was interpreted as a way of keeping Northern Ireland in the single market and customs union – something Dublin had been pushing for.
But DUP leader Arlene Foster said her party could not sign up to any agreement which would allow a border to develop between Northern Ireland and the rest of the UK, forcing Prime Minister Theresa May to go back to the drawing board.
Though the wording of the deal has now changed, it remains controversial.
In the revised agreement, the UK has promised to ‘maintain full alignment with those rules of the internal market and customs union’ if a solution to the Irish border issue cannot be agreed in a future EU-UK trade deal or by any other Ireland-specific technical means.
The precise meaning of ‘full alignment’ has already been subject to widespread scrutiny, with different people interpreting it in different ways.
For Defra Secretary Michael Gove, it means common goals can be achieved through different regulatory means – making the agreement compatible with leaving the single market, the customs union and the Common Agricultural Policy (CAP).
Speaking to the Today Programme on Radio 4 this morning, he said: “Even though we are in different institutions, we want to achieve the same ultimate goal.
“What will happen is we will be able to achieve the same goal – for example, high standards of animal health, in order to ensure there is no hard border on the island of Ireland, but we have the capacity to achieve the same goal by our own means.”
But Chuka Umunna, one-time Labour leadership candidate and prominent anti-Brexit campaigner, claimed the wording meant the UK would remain in the customs union and single market if a deal could not be reached.
Farming groups consistently called for the UK to stay in the customs union and single market before the Prime Minister ruled it out.
This outcome would not necessarily stop the UK from creating its own domestic agricultural policy.
Norway, for example, has full access to the single market – though no say on its rules – and does not participate in the CAP.
The Irish border issue could also have huge knock-on effects for the other devolved regions.
Because the divorce agreement pledges to look for Irish-specific ways to solve the border problem if it cannot be dealt with in an overall EU-UK trade deal, Scotland is asking for the same treatment.
A tweet from First Minister Nicola Sturgeon this morning hinted at possible future battles as she demanded all UK nations have the same access to any special arrangements made for Northern Ireland.
Move to phase 2 of talks good - but devil is in the detail and things now get really tough. If #Brexit is happening (wish it wasn’t) staying in single market & customs union is only sensible option. And any special arrangements for NI must be available to other UK nations.— Nicola Sturgeon (@NicolaSturgeon)
Move to phase 2 of talks good - but devil is in the detail and things now get really tough. If #Brexit is happening (wish it wasn’t) staying in single market & customs union is only sensible option. And any special arrangements for NI must be available to other UK nations.— Nicola Sturgeon (@NicolaSturgeon) December 8, 2017
Welsh First Minister Carwyn Jones also said he expected all devolved nations to be treated the same way on Monday when the original deal was dropped.
We cannot allow different parts of the UK to be more favourably treated than others. If one part of the UK is granted continued participation in the Single Market & Customs Union, then we fully expect to be made the same offer.— Carwyn Jones (@fmwales)
We cannot allow different parts of the UK to be more favourably treated than others. If one part of the UK is granted continued participation in the Single Market & Customs Union, then we fully expect to be made the same offer.— Carwyn Jones (@fmwales) December 4, 2017
What farmers hiring EU citizens need to know
Divorce bill – paying for CAP
The divorce bill is estimated to be between £35 billion and £39 billion – less than previously thought – though EU chief negotiator Michel Barnier has said it is not possible to give a figure because future payments will be dependent on unknowable project costs and exchange rates.
The payment will be broken down into three separate sections: the rest of the EU’s budget for the period 2014-2020, future commitments, and liabilities, including pensions.
The UK will continue to pay for the CAP as if it were still a member of the EU up until 2020, despite the Government’s insistence that Britain will leave the policy on Brexit day in March 2019.
As Ministers have also promised to guarantee farm payments at current levels until 2022, this could see taxpayers coughing up for two separate agricultural policies in 2019 and 2020.
One other potentially thorny issue raised by the deal is that of disallowance fines.
As part of the agreement to stump up all the cash owed for the EU budget to 2020, the UK has pledged to pay its share of ‘net financial corrections and fines imposed’ until December 31 2020.
Asked if this meant the UK would be liable for disallowance fines despite being outside the CAP, a Defra spokesman told Farmers Guardian ‘we will need to discuss how all of this will work in practice in the next phase of the negotiations’.