The Welsh Secretary Alun Cairns has sought to reassure sheep farmers who are worried about their fortunes if Britain leaves the EU without a withdrawal deal.

Mr Cairns told BBC Radio 4’s Today programme: “I would point to the market in Japan that has just been opened to Welsh and British sheep for example, now that is a new market for us, so exports are already taking place there, but that is a significant market for which we haven’t even scratched the surface yet.”

This claim has caused a good deal of argument online, with some people saying that the deal struck between the UK government and Japan over sheep exports will lapse if there is a no-deal Brexit.

What’s the danger?

Mr Cairns repeated the government’s line that is working hard to try to secure a withdrawal agreement with the EU before Britain leaves the bloc on 31 October.

Such a deal could mean we carry on trading with the EU without having tariffs placed on goods we export to Europe.

But if there is no deal, we are likely to have to trade with other countries according to tariff schedules agreed under the auspices of the World Trade Organisation.

That could spell tough times for Welsh farmers in particular.

Vast areas of farmland are given over to sheep grazing in Wales, which is home to just under a third of all the sheep in the UK.

About 35 per cent of Welsh lamb is exported overseas, and 92.5 per cent of those exports go to the EU, according to Meat Promotion Wales.

The fear is that if European importers suddenly start having to pay considerably more for Welsh meat, they could well switch to suppliers in other countries.

How much are the tariffs?

Tariffs are taxes imposed by governments on goods imported from abroad, usually to protect domestic industry from cheaper foreign competition.

They can be tricky to work out, but analysis from the Agriculture and Horticulture Development Board suggests that WTO tariffs could add anything from 38 per cent to 91 per cent to the price of British sheep meat for EU buyers, based on 2017 prices and depending on the exact product.

Trade experts are always at pains to point out that non-tariff barriers to trade – like increased paperwork, health and safety regulations and labelling rules – can raise the price of goods as much as direct tariffs.

What’s the Japan deal?

Mr Cairns stressed that new markets are opening up, as evidenced by a recent agreement that ended a ban on British meat imposed by Japan during the BSE crisis of the 1990s.

It’s true, as critics of Mr Cairns have pointed out, that the government predicts that initial exports of lamb to Japan will be relatively small – about £10m a year, or less than 3 per cent of the value of current annual lamb exports to the EU.

It’s possible that this market could grow in the future, although sheep meat is much less popular in Japan than beef, pork and poultry.

Will ‘no deal’ kill the Japan deal?

There’s been a bit of confusion about this today.

It’s true to say that the deal with Japan forms part of trade agreements that the UK has negotiated while still a member of the EU.

If we leave with no withdrawal agreement, we would probably end up trading with Japan on WTO terms until we can strike a bilateral trade deal with Tokyo.

Reports suggest that Japanese negotiators are trying to extract more favourable terms from Britain and are not willing to simply let us “roll over” or replicate the terms of the existing EU-Japan trade deal.

We know from government documents that negotiators do not expect to have a UK-Japan trade deal in place by the time we leave the EU. That would probably mean we trade on WTO terms.

In fairness to Alun Cairns, we should point out that the current tariffs added by Japan to imports of sheep meat under the WTO schedule amount to precisely 0 per cent.

So arguably, it’s not unreasonable to point to Japan as a potentially valuable export market, whatever happens with Brexit: British farmers will be able to export lamb to that country tariff-free, deal or no deal.

But the relatively small size of the likely future Japanese market, compared to immediate potential losses in the massive EU market, means this will be cold comfort for many Welsh farmers.

Meat Promotion Wales says a no-deal Brexit would be disastrous for local farmers, with the lamb export trade “almost completely wiped out”.

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