Mr. Jim Power:

On the specific issue of WTO tariffs, there are 5,200 items included in the EU-WTO trading arrangements. In the food sector they typically average between 30% and 50%. My understanding is that the highest is on commoditised products such as beef and dairy products and could be in excess of 50%. One way or the other, depending on the tariff applied, the elasticity of demand would be strong; therefore, if one was to have a 30% to 50% tax added to any commodity exported, it would have a huge impact on the demand for it.

Deputy Thomas Pringle asked a question about Teagasc's estimate of €800 million. That is a conservative estimate of what the damage could be, but it would obviously depends on what trading arrangement was agreed to. If it is a hard Brexit and WTO rules are applied, the figure will be in excess of €1 billion at least, but it is a number that is very difficult to calculate because one is talking about so many products and markets. It would, however, be north of €1 billion, which would be a serious hit to the agrifood sector.

One of the other big questions is, outside the European Union, will Britain seek to import cheap lamb from New Zealand? Will it import beef from Argentina and Brazil? My understanding is 10% of beef imports to the United Kingdom come from South America; clearly, therefore, there will be a massive push to try to increase these imports. One of the reasons there will be a massive push is one of the problems with food policy in the United Kingdom for decades - it was instrumental in the BSE crisis - is that there has been a very strong cheap food policy. That has been the position for years and I do not see it changing. Rather than accepting higher food prices, as a result of the application of tariffs in the European Union, Britain will aggressively pursue cheaper sources in South America, New Zealand and other places. That is a very real threat.

There is a significant opportunity for the displacement of imports from the United Kingdom. If one goes into an Irish supermarket and looks at the products on the shelves imported from the of imports from the United Kingdom - yoghurt, cheese and many basic branded products that we produce in this country - there is not too much that we import from it that we do not already produce or could not produce here. That is the opportunity presented, but it is not, by any stretch of the imagination, an opportunity that would be sufficient to offset the damage caused by tariffs on our exports and by having reduced access to the UK market.

There is debate about whether it would be in the interests of Germany and other EU countries to make the process as difficult as possible. I could give the committee 100 different answers to that question because not only will the other 27 EU member countries have their own unique interests, within these countries different sectors will also have their own unique interests. For example, car manufacturers in Germany, including BMW, that sell a lot of cars in Britain will obviously want to have as easy access as possible to the UK market. The fundamental issue is that if one makes leaving the European Union remotely easy, it will open up a very dangerous can of worms. Down the road one could certainly see other countries pursuing a similar path. In the next couple of years the European Union is facing into its most difficult period since its beginning back in 1958-1959. Much of it has to do with politics at EU level and the anti-EU sentiment coming through in the political system. Against that backdrop, the European Union will be very reluctant to open any door that might make leaving the system easy because that would have a house of cards effect. If one looks at the issue from a currency perspective, the reason Greece is still part of the eurozone is not that it is an incredibly important part of it but symbolically if one country was to leave the system, the house of cards could come crumbling down. Politics will dictate that the process be made as difficult as possible.

Since the vote, the UK economy has held up very well. To me, the key aspect at which to look at is the level of business investment in the of imports from the United Kingdom, particularly by companies that service the EU market. That will be the real test in the next couple of years. Given how much food the United Kingdom imports, these currency moves - we have seen the weakness of sterling - will increase food price inflation, at least initially, but it will actually intensify the efforts made by the United Kingdom to source cheaper food and that will push the agenda of exploring South America and New Zealand as potential markets for cheaper food. The overriding point we need to remember is the attitude of the United Kingdom towards food prices and cheap food and also the total antipathy towards providing support for the UK agriculture system. That is a big challenge for the United Kingdom. If it leaves the European Union, it will lose CAP funding. What will British agricultural policy be like? It will be a lot less supportive of the UK agriculture system and perhaps that will provide another opportunity for Ireland to fill some of the gap. It will be an incredibly difficult and complicated process.