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Brexit cliff edge is a real risk we must prepare for – Hayes

Brexit cliff edge is a real risk we must prepare for – Hayes

WTO tariffs would have a disastrous impact on Irish exporters

Brian Hayes MEP today said the worst-case scenario outcome from Brexit would mean disastrous WTO tariffs for Irish exporters.


“Given the week we’ve just had where the back and forth between EU and UK sides has almost reached boiling point, the Irish government needs to be prepared for the possibility of a worst-case scenario Brexit.

“Effectively, the worst-case scenario means that the EU and UK don’t come to any agreement, there is a cliff edge effect and WTO tariffs go up between the EU and the UK immediately. While I still consider this outcome unlikely, we saw that through the exchanges between Prime Minister May and EU leaders that the negotiations can get ugly fast.

“This is why the government needs to start working on contingency plans in the event that Irish exporters to the UK are suddenly hit with WTO tariffs after Brexit.

“Contingency planning also needs to be part of the EU’s response to Brexit. The EU needs to set up a Brexit globalisation fund for all sectors that will be badly affected in the event of a hard Brexit; this is not only important for Ireland but also other countries that have strong trading relationships with the UK.

“Equally, we need to strengthen our partnerships with these countries that have deep economic ties with the UK; countries like the Netherlands, Belgium, Denmark and Luxembourg will also be badly affected by a hard Brexit.

“The implications are huge for various Irish business sectors, particularly agri-food, dairy and clothing. Under the EU’s external trading arrangements with WTO countries, dairy products are subject to an average bound tariff of 35.5%; animal products are subject to an average bound tariff of 16.9%; clothing products are subject to an average bound tariff of 11.5%.

“At the moment the government is working on the basis of a soft Brexit. But we cannot be complacent about the dangers that lie ahead in these talks. Both sides already have different expectations about how the process will play out.

“The effect of the UK moving to WTO rules would be tariffs on UK exports to the EU. It is only logical that the UK would impose a reciprocal arrangement to EU imports to the UK.

“Think of the impact that such high tariffs could have on our agri-food sector that represents 7% of our GDP and around 150,000 jobs. 47% of all our agri-food and drink exports went to the UK in 2015.

“It would also be a disaster for our imports – Ireland imported more than £3 billion worth of food and drink goods from the UK in 2014.

“Theresa May has consistently trotted out the ‘No deal is better than a bad deal’ slogan. Yet, the UK government doesn’t seem to understand the full whack that this could have on the UK and its main trading partners in the EU.”

EU average External Tariffs under WTO rules
Category AVG %
Animal products 16.9
Dairy products 35.5
Fruit, vegetables, plants 9.9
Coffee, tea 6.0
Cereals & preparations 15.7
Oilseeds, fats & oils 6.0
Sugars and confectionery 20.6
Beverages & tobacco 19.0
Cotton 0.0
Other agricultural products 3.1
Fish & fish products 11.0
Minerals & metals 2.0
Petroleum 2.0
Chemicals 4.6
Wood, paper, etc. 0.9
Textiles 6.5
Clothing 11.5
Leather, footwear, etc. 4.2
Non-electrical machinery 1.7
Electrical machinery 2.4
Transport equipment 4.1
Manufactures, n.e.s. 2.5

Source: WTO

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