1. Potential impact of Brexit on the Sheep Industry Dr Kevin Hanrahan, Trevor Donnellan and Fiona Thorne Teagasc

2. Brexit Disclaimer
Please note this document is part of ongoing Brexit analysis and scenario planning for input into larger Government deliberative processes. Unless explicitly referenced by Government decision, any proposal contained in this document does not represent Government policy and should not be represented as such.
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

3. Brexit and the Irish Sheep Industry
Brexit timeline
4 channels through which we see Brexit affecting Irish agriculture
What makes the Sheep industry peculiar?
Brexit outcome uncertainty
Tariffs and Tariff Rate Quotas (TRQ)
Conclusions ???
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

4. Commission’s Brexit timeline
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5. 4 Brexit Channels Immediate impact via exchange rate
Impact of Brexit on EU budget and CAP
Impact of future UK Ag policy on UK self-sufficiency
Future tariff & non-tariff barriers to trade
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

6. Where are we now? Where are we going?
Tariff and non-tariff barriers to trade between IE and UK are non-existent
Regulatory frameworks the same
No customs procedures apply to trade
No tariffs levied on trade
With Brexit
Regulatory frameworks will diverge => extra costs
UK move outside of Customs Union => extra costs
UK exit from EU could => Tariffs => extra costs
Dr Kevin Hanrahan

7. Single Market, FTA and WTO rules
What does “WTO rules” mean?
Principally about tariff barriers to trade
this is (relatively) clear: UK inherits EU schedule and if no FTA faces EU common external tariff
Also about agreed limits on export subsidies, trade distorting domestic supports, TRQ
Much less clear
WTO Rules
Single Market

8. Single Market, FTA and WTO rules
Where we will land between the current Single Market rules and WTO rules is the known unknown
Landing will be determined by Brexit negotiations process
Primarily about politics not economics
The nearer we get to where we are now the better
However, impossible to see how where end up can be equivalent to where we are now
Dr Kevin Hanrahan

9. What makes Sheep industry peculiar?
UK is a significant exporter of sheep meat & largest EU producer
Ireland and UK are competitors on continental EU markets
EU is a major importer with most imports under preferential terms (TRQ) from NZ and Australia
Brexit might provide opportunities
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

10. What sort of tariffs might be faced by UK exports to EU?
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

11. Preliminary Static Analysis: Impacts on family farm income
Irish Grassland Association Sheep Conference and Farm Walk, Mullingar May 2017

12. Conclusions The clock is running: Article 50 has been triggered
Trade talks only begin once “sufficient progress” made on the “divorce”
Whatever the outcome it will be inferior to current situation
Negotiations will be about getting as soft a Brexit as possible = keeping preferential access to UK market.
Possible upside for lamb prices depends
Future trade agreement
How TRQ are allocated between UK and EU
Upside for lamb will be offset by downsides
from EU budget and
negative impact on other agricultural output prices
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