Brexit: the net closes

09/01/2019

If that meant that they were prepared to support Mrs May's deal, the prime minister's troubles would be over. But that isn't the way it's going to work. In the perverse dynamics of Brexit, majorities can only be found to oppose things.

And for all that, there surely cannot be any MPs who seriously believe that their actions are going to stop the UK drifting into a no-deal scenario, especially as the amendment will have very little material effect. However, clearly, some MPs believe it will, apparently unaware that no-deal is the default outcome in the event of the withdrawal agreement not being approved.

But while the MPs have been playing their fatuous little games, others are making their own judgements, not least the French government which now seems to be firming up on its views about UK intentions.

The trail leads back to a memorandum dated 20 November published by the French Ministry of Agriculture. From this, it is apparent that the French government was already fully aware that Brexit permanently changed the trading relationship with the UK.

In particular, it noted that Brexit meant that sanitary and phytosanitary measures would have to be applied to animals, plants, animal products, plant products and other goods imported from the UK, in approved border control posts. As a result, it was embarking on a major staff recruitment programme to enable this to happen.

It had decided to create new border inspector jobs, with inspectors at Calais Port and Calais Eurotunnel, Caen-Ouistreham, Cherbourg and Roscoff. Where there were already established border control posts, the establishments were to be increased. This would apply to Dunkirk, Le Havre, Saint-Malo and Brest.

Different categories were involved, from heads of posts and their deputies, to veterinary and phytosanitary inspectors. The number of posts per category had not been precisely determined and was to depend on the nature of the controls to be implemented.

Although applications were invited before 14 December, the memorandum noted that the date of the re-establishment (sic) of the border controls was "not yet known" and would depend on the outcome of the ongoing negotiations.

As far as the Ministry was concerned, the starting dates could be either 30 March 2019 or 1 January 2022. But it nevertheless warned that the regional departments of Hauts-de-France, Normandie and Bretagne must prepare to recruit "emergency teams" at the border posts. As a result, it said, the new positions had to be filled as of 1 February 2019, giving time for mandatory training of two months, from 1 February to 30 March 2019.

Jobs are now being formally advertised, although the job descriptions (for example, head of post and inspector) seem to lack details of starting dates. However, a Facebook advertisement indicates that interviews are to be from 10-14 January. This seems a little late if the positions are to be filled by 1 February and, given that two months of training is "mandatory", it doesn't seem possible that the inspection service will be ready in time.

Nonetheless, this provides evidence of a formal commitment by the French government to staff border control posts, even if the lack of further information on staffing levels does not indicate the scale of that commitment. And crucially, we are to see border posts attached to Calais port and Eurotunnel.

A further mystery is the precise location and scale of the border control posts. What is not generally understood is that these facilities are provided and maintained by the private sector, which also manages the buildings for the officials who occupy them.

In Marseilles, for instance, the Syndicate of Freight Forwarders created a dedicated company called STM Entreprise to manage the Pif-Pec there. In Le Havre, the Union of Freight Forwarders and Commissionaires du Havre funded the existing inspection facilities (pictured), spending in 2007 nearly €3 million on a 10,000 square metre building, equipped with seven docking bays.

Utilisation, however, seems remarkably low, handling between ten and 100 consignments a day with 17 inspection staff (one of whom has some strange ideas about personal hygiene – see the link).

Even though the unit is earmarked for expansion, as of October last year the president of the Le Havre syndicate was still seeking clarification from Brussels on health certification and was mooting collaboration with other Normandy ports under the banner of Ports Normans Associés. Clearly, no decision had been made on what additional infrastructure was required.

There is, of course, still the possibility of furnishing temporary facilities, but those – if they can be found – will hardly be satisfactory. But, whether or not they are late or on time, the net is closing on UK food exports. The days of free movement of goods are coming to a close with a vengeance.

And nor are we going to be alone in seeing the effects. The European Livestock and Meat Trades Union (UECBV) has produced a report, suggesting that the magnitude of the shock of a hard Brexit would be significantly greater than that caused by the Russian food import ban in 2014.

Looking at the situation from the European perspective, it assumes that the UK will impose its own border controls and calculates that the additional burden of veterinary and health checks on animal products would increase costs at current trade levels for EU meat exporters by over €43 million per year.

Its concern is that the UK market is one of the highest value markets for EU meat, and the UK beef price is one of the highest in Europe, with the same largely holding true for pig meat and sheep meat prices.

A situation in which trade with the UK was severely restricted, it says, would therefore not only mean a massive loss in volume of trade for the EU-27, but also a loss in high value trade with a sophisticated consumer market. Its greatest fear is that trade in all meat products between the UK and the EU could be eliminated.

Here, of direct interest to the UK, it notes that every carcass, whether beef, pig or sheep, is butchered into an array of cuts, each with differing value. These are sold across multiple markets and market channels in order to match supply and demand and maximise the overall market revenue for the full carcass.

Meat trade therefore involves a carcass-balancing element. The UK, for example, imports and exports a similar quantity of lamb, but its imports are primarily leg while its exports are primarily carcass. Thus, trade is important for finding a market equilibrium, as it would be impossible for producers to extract value from cuts for which there is no domestic demand.

Interestingly, the report also draws attention to the UK as a land-bridge for trade within in the EU27 - the two-way flow of product between Ireland and the other 26 EU countries – which would become extremely problematic and, at a minimum, highly bureaucratic.

More than 90 percent of Irish meat exports to continental Europe flow via the land-bridge through the UK, due to the cost-effectiveness and speed of this transit route compared to, for example, the sea route direct to France. Transit using the land-bridge from Ireland to Calais takes an average of 10.5 hours, compared to 20 hours by sea to the port of Cherbourg in northern France, or at least 38 hours to the port of Zeebrugge in Belgium.

And in what seems a familiar lament, it states that "it is essential that preparations of ports begin ahead of time, in order to protect against a hard Brexit outcome". That, it might seem, is too late to make a difference, with the ports struggling to deal with the implications. All too soon, we will discover what these are, from direct experience.