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Ed's Brexit round-up - what now?

18th Jan 2019 / By Ed Barker

As expected, Parliament comfortably defeated the Government over whether or not to accept its Withdrawal Agreement with the European Union on Tuesday. And it wasn’t even close – the defeat was by about 200 votes and surpassed many expectations.

EdBarkerNPALater, on Wednesday, we saw a no confidence motion called for by the Opposition, which as expected was won comfortably by the Government. An unusual display of agreement and solidarity amongst the conservative party and the DUP. What happens next though, is a little unclear as we are really starting to wade into uncharted territory – more so than before.

As specified under the Dominic Grieve amendment, the PM has to come back to Parliament on Monday and outline what she plans on doing next. It is anticipated that whatever this plan is, it will be voted on by MPs the following week.

She has been in meetings with all other political parties in parliament, with one notable exception: Jeremy Corbyn. He will not engage until the PM formally takes no deal off the table. As no deal is the default scenario, this is very difficult to do and may instead be a cynical ploy to engineer a Government that cannot make a breakthrough and therefore be minded to call a General Election.

I am sure I speak for everyone when I say another General Election would be just the bit of political excitement and intrigue we have all be craving (rolls eyes).

As far as I can see it, the only real options (in order of likelihood) on the table are:

  • A rejigging of the Withdrawal Agreement that helps bolster the backstop arrangement, give it a time limitation or just worded better. Getting the DUP onside will likely mean the ERG/Eurosceptic MPs follow
  • A request to extend Article 50 and give the Government more buying time (and delay everything yet further)
  • Hold on and play a game of chicken with the EU over heading into a No Deal, (as it does create many problems for the EU (not as many as for the UK, mind))
  • Call another General Election and let different parties make their position clear in Brexit in their manifestos (though it could create a hung parliament and we are back to where we started)
  • Issue another referendum either as an in/out or just different options/versions of Brexit; Government deal vs Norway approach vs Hard Brexit for example.
  • Offer the NPA to formally take over Government affairs and Brexit.

As far as we are able to tell (from conversations with Government) a no-deal at this moment in time means the following for the pig sector:

  • Imported products can still come in tariff free and subject to same inspection processes (ie, very few) – the aim is to keep prices and availability comparable to what they are now. This will be the case for the EU and rest of world as under WTO rules we cannot treat countries differently to each other (you can only do this if you have a free trade agreement in place). This applies to all products, and not just food.
  • Exports of pig products to EU are unlikely to be hit by tariffs straight away (this is because there is a lot of EU quota to use up).
  • Exports to China and other 3rd countries where the UK has agreed bilateral deals are expected to be able to continue in the same way. This is not 100% assured but no kickback has yet been experienced from those countries as the standards will be the same and the agreements have been made bilaterally. Work is ongoing with embassies and others to make sure these assurances are given in the most important export markets.
  • Pig products and live animals will be physically able to be exported but would be subject to inspection at borders on products going out to the EU.
  • Live animals being exported will have to go via a Border inspection post in country of arrival.
  • Ireland is a major issue and there has been no tangible ideas on how to inspect movement of goods from north to south without a border in place.
  • EU nationals will be free to stay and register to be here. Transition in place until end of 2020 for incoming EU migrants.
  • All existing free trade agreements that EU has with other countries (Japan, Canada) likely to cease for UK unless it can come up with a bilateral agreement in the interim.

As you can imagine the issues being raised as a result of no deal are increasing by the day and we are always trying to pick through the most relevant aspects for producers – as it emerges. It is important to consider the market shocks created by a no deal and where this may go for consumer demand, currency, and ability to move cull sows for example.

Stay tuned and we will be providing an update as to what the new ‘proposal’ will entail.

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