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The UK and Japan have concluded a free trade deal in principle that will replace the deal the UK participated in as part of the EU.
As details remain to be finalised, it will be interesting to note if the UK has secured better terms than the EU deal.
The UK had been pushing for additional access on soft cheeses which prevented the deal being concluded earlier.
First new deal
This will be the first trade deal with a major trading nation that the UK has concluded outside the EU. Talks are also ongoing with the USA, Australia and New Zealand.
Concluding a deal with the USA will be particularly difficult, given that the different production standards that are in operation regarding use of hormones in beef and chlorine for washing carcases and meat.
Australia and New Zealand
On the other hand, it is expected that the UK will quickly conclude a deal with New Zealand and Australia, which is likely to have a significant impact on Irish exports of beef and sheepmeat to the UK.
According to the UK’s own strategic negotiating document, it expects an increase in imports from Australia of 80% and an increase of 40% from New Zealand.
The UK government expects that this will be mainly made up of beef and sheepmeat and that it will cause a contraction in UK production.
If it has a negative impact on British farmers, it is inevitable that it will hit Irish exports hard.
Brexit
It has been a particularly turbulent week in the negotiations between the EU and UK on a trade deal to take effect when the UK completes its break with the EU customs union and single market in January.
It is accepted that the UK legislation that will take effect in the event of no deal being reached will break the terms of the Irish protocol in the withdrawal agreement.
With the EU now threatening legal action on this, it seems like it will be difficult to conclude an agreement.
There was no sign of progress on the outstanding issues at this week’s negotiating round in London and the sides will resume again in Brussels next week.
At this point, it appears a comprehensive trade deal is most unlikely, with a no-tariff no-quota arrangement the best that can be expected.
The Irish Government this week is writing to importers and exporters advising them of the procedures that will have to be followed from 1 January 2021.
This will include customs declarations and health certificates, irrespective of whether or not a deal is concluded.
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