Richard North, 27/09/2018  
 


International Air Transport Association (IATA) CEO Alexandre de Juniac has been talking to Bloomberg about the oncoming "Brexit chaos" in aviation, ruminating on the views of the industry's paying customers.

"Everybody thinks there'll be a solution and so they're not deterred from buying a ticket", de Juniac says, "but the closer we get to April, the more uncertain things are and the bigger the impact will be".

That, though, seems to be very much the sentiment across the board – and inside most industries. To date, even senior executives of major listed companies have been convinced that it'll be alright on the night – as we found from personal experience. But, as we get closer to the day, people are beginning to have second thoughts.

Talking of his own industry, de Juniac says that the notion that the issue of grounded flights could be addressed in the final hours approaching the Brexit deadline is nonsensical.

"It is crazy", he told Bloomberg. "To think that you could negotiate such technical matters in the last hours on as sensitive a subject as aviation, with the safety issues. It's totally unprofessional, risky and disrespectful to the passengers who will have bought a ticket".

And, if elements of aviation industry are beginning to see the light, so too, it seems, is the National Farmers Union NFU). To date, it has displayed an almost Pollyanna level of optimism over Brexit but, according to the Guardian, it is finally getting the message, warning that a no deal Brexit "'would stop British farming exports for six months".

It has certainly taken long enough for the realisation to dawn. I wrote about this in January 2017 and many times afterwards, including this piece in July of last year, with a Monograph setting out the detail in the April - over 17 months ago.

But if the media and the politicians are in their own little bubble, so too is the NFU. Having ignored my work, and the European Commission's Notice to Stakeholders, published in February of this year, it has finally realised that a hard Brexit will close down the export of products of animal origin to EU Member States for the foreseeable future.

The farmers' union could, of course, found this out for itself - all it had to do was look up the relevant EU law. But, despite its resources, it has had to wait to be spoon-fed from Defra and the European Commission to point out what it should have already known for several years.

The crunch comes with the NFU having been told "informally" that although Britain is in complete regulatory alignment with the EU, if there is no deal, the same health checks countries such as China and the US undergo will apply to UK suppliers.

More to the point, before any products of animal origin can be exported, the UK must be listed by the EU as an approved exporter, with separate approvals required for each product sector. This has also been published in one of the government's recent "technical notices", this one entitled: "Exporting animals and animal products if there's no Brexit deal".

In the key passage, we see that, "the EU would require the UK to be a listed third country". The document then adds: "In the unlikely event of a 'no deal' scenario, the UK would apply for this status but cannot be certain of the EU response or its timing. Without listed status no exports to the EU could take place".

For approvals to be given to the meat sector, some 6,000 abattoirs, processing plants and cold stores will have to undergo inspections by the UK "competent authorities" for their establishment numbers to be re-issued. A sample of these must be checked by EU officials and then the UK food safety plan must be submitted.

Once all the hurdles have been overcome, the standing veterinary committee makes recommendations for approval, and Commission must them submit the UK for listing to the Council which must publish a formal notice of approval in the Official Journal. The whole process, the NFU has calculated, will take six months "at a conservative reading".

This realisation has led NFU's director general, Terry Jones, to declare that: "What we are talking about in effect is a six-month trade embargo until such time we can get the product in". And then, he says, "from that point we will face the European's external tariff wall meaning we will be priced out of the market".

Jones then observes that the UK government is planning to keep imports flowing by allowing goods to enter without checks to Britain, with tariffs reduced to keep food inflation below five percent.

Thus, he notes that, in order to keep the shelves full and food inflation down, the government is going to adopt one stance. But, from the discussions the government is having with the EU, it appears that the EU will not start the process of approving the UK as an exporter until 30 March – after Brexit.

On that basis, however, we could find ourselves with a surplus of certain products, such as Welsh lamb. Fastidious British consumers are also less inclined to by offal and dark poultry meat, much of which is exported to the Continent.

If such products cannot be exported, they are likely to be used in food processing and, for a while, that will drive down the prices of some manufactured foods. The effect of a "no deal" Brexit, therefore, could be mixed. For a while, we could be looking a some foods being considerably cheaper than they are now.

It may also render unnecessary the government's appointment MP David Rutley as the minister to oversee the protection of food supplies through the Brexit process. Rather like drought ministers whose appointments have been accompanied by rain and floods, Rutley may find himself presiding over a surplus of food in the short-term.

Overall, though, the "take home" point is the recognition by the government that, all things being equal, exports of products of animal origin will cease if we have a "no deal" Brexit – despite regulatory alignment on day one of Brexit.

This completely contradicts the nonsense churned out by Shanker Singham and the IEA – to say nothing of Mr Rees-Mogg and his ERG colleagues. We are finally seeing a dose of reality impinge on the debate, with the government also pointing out that – when exports are allowed to resume - all animal products and live animals from the UK to the EU "would need to travel through a Border Inspection Post (BIP) within the EU".

This requirement will apply even if we do negotiate a deal, such as Canada plus. The Guardian thus notes that the UK loses the chance of exporting meat through the Dover-Calais route, as there is no BIP at Calais.

Wrongly, it says that the nearest border inspection posts are Zeebrugge and Rotterdam, missing out the units at Dunkirk and le Havre – albeit that neither of these have the capacity to handle the extra traffic.

Nevertheless, with glacial slowness, more of the consequences of a "no deal" Brexit are being realised, although we are also told that the EU could introduce emergency legislation to keep food from Britain flowing, but "that is their call, not our call".

This much, we're getting from the Financial Times which tells us that Brussels is making plans to pass emergency rule changes to cope with a "no-deal" Brexit in as little as five days.

This will be a fast-track process that allows European Commission to accelerate passing legal acts, details of which were which was explained to member states on Wednesday, will permit the EU to prepare for a worst-case scenario without undermining negotiations with the UK on a withdrawal deal.

Doubtless, these are the unilateral measures which Sir Ivan Rogers mentioned some time back, indicating that the EU is not going to be sitting back relying on the UK to negotiate the infamous mini-deals. With or without a deal, it is going to be looking after its own interests.

And with the realisation dawning over here that we are in for a torrid time, in the event of a "no deal" scenario, we can only hope that the Cabinet's loss of enthusiasm for a "no deal" Brexit is rooted in reality. One suspects, however, that reality has yet to reach that far.






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