Many smaller Irish exporters have mixed feelings about the trade agreement between the European Union and the United States.
Last week, they understood there was still an outside chance that discussions could go off the rails with the possibility of a trade war. At the same time, they are less than impressed with the outline deal being presented in the media.
Sarah Furno, of Cashel Blue, greeted the news from Scotland yesterday with a “degree of relief” and the sense that the Tipperary cheese company can now make more definite plans for the US market.
“Uncertainty is impossible and disabling especially in a prolonged manner,” she says. “Overall we feel it could have been worse. It’s a relatively even playing field for imports and there is enough light to keep doors open.
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“Of course it will hurt the average American most”.
Ms Furno said the 30 per cent rate threatened by US President Donald Trump would have pushed Cashel products off US shelves.
Leo Cummins, of Hazelbrook Confectionery in Co Kildare, decided earlier this year to shun the US market due to the uncertainty. On hearing the news of the agreement, he said he was even more convinced that ignoring the US market in the short term was “the right thing to do”.
“Obviously one has a concern that the deal as it stands looks quite lopsided in favour of the US,” he says.
“I personally think that American candy sales will decline in Ireland, the UK and Europe over the next three years as consumer sentiment towards America becomes more negative.
“Whilst it appears that there will be no tariffs on US candy imports into Europe, American candy manufacturers will have to pay extra for their cocoa and other ingredients that are not produced in America and that will push their costs higher and hence their prices to European customers.”
Mr Cummins says more expensive US confectionery will open doors for Hazelbrook in the UK and Europe as importers there will look to find cheaper alternatives.
Whiskey manufacturers were particularly concerned at the possibility of trade talks failing.
Brendan Carty, of Killowen Distillery in Co Down, will now have to contend with two different trade deals – the EU deal at 15 per cent and the UK one at 10 per cent.
As Irish whiskey is bottled and bonded on both sides of the Border, it presents new headaches for the likes of Killowen.
“If a distillery sells 50 per cent distilled in Killowen and 50 per cent distilled in the Republic, I suppose our tariffs will be complicated and will fall between the two,” says Mr Carty.
“That’s the nature of navigating a global market. It’s always changing and very complex. It’s the consumers who will take the hurt in the end.
“It’s always a navigation exercise working things out with overseas partners, part and parcel of the business, so we won’t get too upset about it”.
The Irish Whiskey Association still hasn’t ruled out the chance that the agreement could yet see the return of “zero-for-zero” trade in spirits. Director Eoin Ó Catháin says the 10 per cent rate currently being applied, along with a weakened US dollar, has forced some operators to shut their doors.
“We are hopeful that, as we learn more about this deal and discussions on its implementation continue, a mutually beneficial arrangement and the removal of tariffs can be secured,” he says.
The overriding sentiment from many exporters is that the deal represents an unwanted regression. With no upsides for Irish businesses – other than avoiding even worse terms – it is the new price of doing business with the US.
