The last-minute agreement on the Irish border, which has allowed Brexit talks to move to the second stage, has been met with a cautious welcome from the Irish Co-operative Organisation Society (ICOS).
After negotiations with the Democratic Unionist Party, Theresa May reached a provisional deal to avoid the creation of a hard border in Ireland, with “regulatory alignment” coming into place once the UK leaves the single market and customs union with the EU.
Previously, ICOS, which is the voice for co-ops in Ireland, had stated its concerns over the impact of Brexit on co-ops in Ireland and in Northern Ireland. Its worries include disruption to supply chains and joint operations across Ireland and Northern Ireland, with the rural economy in the border counties supported by the €3bn (£2.5bn) cross-border trade.
European affairs executive Alison Graham told the News: “Ireland currently has an all-island agricultural economy, with strategies, economic structures and government policies which span both the Republic and Northern Ireland.”
She said many goods repeatedly cross the border before they become a finished product, with dairy co-ops “uniquely exposed” – half of the northern Irish milk is bought by co-ops based in the Republic of Ireland.
These concerns led ICOS to call on the UK to reverse its policy and remain in the single market and customs union. But last week’s deal, which saw the UK commit to “regulatory alignment”, has eased some of these fears, said Ms Graham.
She said: “Overall we would, of course, see this as a very positive development for the entire EU and especially for Irish businesses.
“We believe the Irish government and the EU negotiation team have achieved a lot – we are now able to move on to the trade talks, which was a vital necessity in order to overcome the uncertainty facing business, and we have also established a new default position.”
She added: “Should the negotiations end with a trade deal the UK has agreed to ‘maintain full alignment’ with single market and customs union rules. This goes a long way towards easing fears on the possibility of a cliff-edge scenario, of a hard border and WTO rules.”
Ms Graham welcomed indications that an EU-UK deal would include an agreement on regulatory alignment.
“The alternative – regulatory divergence – is a top concern for Irish co-operatives, as it would add significantly to trade costs, increase customs issues and threaten the position of EU imports on the UK market,” she said.
This UK market is very important to Irish co-ops and farmers in general, with 37% of agri-food exports (worth €4.13bn) going to the UK in 2016.
However, there is still some uncertainty surrounding the agreement. Brexit secretary David Davis was forced to clarify remarks which suggested the deal “was much more a statement of intent than it was a legally enforceable thing” and Theresa May has said that “nothing is agreed until everything is agreed”.
Ms Graham warned: “The clear contradictions in the UK’s desired outcome remain. UK government stresses that it will be leaving the single market and customs union, however within the agreement it also commits to a ‘guarantee’ on avoiding a hard border on the island of Ireland, while at the same time ensuring ‘the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market’, with no indication on how this will be achieved.
“There has also been debate over how binding this agreement is.”
And she repeated ICOS’s plea for more business certainty.
“We maintain our call for transitional arrangements, which maintain the status quo, to be agreed as soon as possible in order to fully remove the uncertainty facing businesses. We also call on the EU and the UK to ensure that these commitments are fully respected and translated into a legally binding agreement, together with the transitional arrangements without delay.”
She added: “We also very much welcome the strategy outlined in the agreement to address specific Irish issues also within the trade talks, including the matter of the transit of goods through the UK on their way to mainland Europe.”
Irish co-ops rely on the UK as a land bridge into the EU, she said, because it is quicker than ferry transport, and ICOS is worried these routes would be affected once the UK leaves the customs union.
“It is doubtful that the current physical infrastructure at the ports and other entry points in the EU and the UK have the sufficient space to conduct the necessary customs checks,” she warned.
“Any delay would mean missed connections to further destinations, mandated rest times for drivers, and spoiled goods.”
ICOS has been working with European agri-cooperative and farmer association, Copa Cogeca, helping establish a Brexit Task Force, led by ICOS board member, and Lakeland Dairies chairman Alo Duffy.
It has also met regularly with EU negotiators and taken part in the Irish government’s All-Ireland Civil Dialogue on Brexit, and the All-Ireland Sectoral Dialogue, organised by the Irish Department of Agriculture, Food and the Marine to address the agri-specific matters.