Irish farmers and dairies sell 100,000 tonnes of cheese to the UK every year, so it's no wonder the prospect of WTO tariffs replacing the Single Market is keeping the sector awake at night, writes Prime Time's Robert Shortt.
Inside the Ornua factory in Staffordshire in Britain’s Midlands, packs of Pilgrim’s Choice Cheddar whizz by in a blur. The factory produces 40% of all the hard cheese consumed in the UK. Sixty container trucks packed with 20kg blocks of Irish cheddar arrive here every week, part of the 100,000 tonnes of cheese our farmers and dairies sell to the UK every year.
Ornua, formerly known as the Dairy Board, built this factory from scratch ten years ago. It’s state-of-the-art. The fact that an Irish company built this factory in the heart of Britain should tell you something about how important the UK market is to the 32,000 people directly employed in Ireland in our farms and dairies.
"What would keep us awake at night is WTO tariffs…", Ornua’s incoming CEO John Jordan tells me in an interview we’ll carry as part of a Prime Time report this Thursday on the Brexit crisis.
Those sleepless nights focus on the average 40% tariff levied on dairy products under the rules of the World Trade Organisation (WTO). The WTO governs international trade when countries aren’t part of trade agreements like the EU’s Single Market and Customs Union.
A so-called ‘hard’ Brexit means the UK leaves the EU with no agreement. Trade will then be subject to WTO rules.
Those on the frontline say that wouldn’t be a trade war as much as a nuclear-style Mutually Assured Destruction of trade.
"WTO rules, if they came in…would bring hugely penal tariffs for all Irish dairy products into the UK market. It would make us dramatically uncompetitive in the UK market" says Jordan.
"Over the next few months, we’ll see the greatest game of political brinkmanship ever played across these islands and beyond"
Of course, cheese isn’t the only dairy product Ireland exports. And the industry is busily developing new cheese products and opening new markets. But like other parts of our food industry, decades of investment and specialisation focussed on the UK market can’t be turned around overnight.
While Brexit might be an Irish problem, Jordan explains,"...cheddar is uniquely an Irish problem."
Here’s something worth considering next time you much into that cheese sandwich: 90% of the cheese we make is cheddar. 60% of that is exported to the UK earning €272million for the rural economy. The problem is, apart from ourselves and consumers in the UK, there’s little demand elsewhere for cheddar. So our cheese sector is almost uniquely exposed to the dangers of a hard Brexit.
The EU’s Chief Brexit Negotiator, Michel Barnier, warned again this week that more preparation needs to be done in EU capitals in case talks between the UK and the EU break down.
Barnier said something similar when he was in Dundalk at the end of April but his warnings are sounding more and more ominous as the timetable on Brexit ticks down.
Squaring agreement on the Irish border is still the first and, it seems, the most formidable hurdle for negotiators.
For Brexiteers in the UK Parliament, like former Conservative Party leader Iain Duncan Smith, talks on trade must take place first before the Border issue is resolved. He tells us how he thinks the position of the Irish government and the EU has been wrong on this from the start of negotiations.
On the Remain side, we speak to rebel Tory MP Anna Soubry, who believes the only solution to the Border would be for the UK to remain a member of the Single Market and Customs Union.
The high politics playing out in Westminster is full of, occasionally, exciting drama. This week Theresa May survived yet another vote on the Bill which will give effect to Brexit.
But the big political showdown is yet to come. Come October push will come to shove. The final deal between the UK and the EU will have to be agreed. The UK’s parliament will have to vote on it. Someone will have to compromise.
Over the next few months, we’ll see the greatest game of political brinkmanship ever played across these islands and beyond.