There is no doubt that the gap has closed between the UK and EU on a Brexit deal, with a chance of a conclusion and a UK departure on 31 October.

There are many issues, not least getting parliamentary approval in Westminster as the previous prime minister found out on three occasions.

If a deal is to take place, it will involve some sort of special arrangement for Northern Ireland (NI), probably a rebranded backstop that perhaps keeps NI aligned with the EU for customs and standards while the rest of the UK will be free to do its own thing.

In practice, if a deal is agreed, the EU and UK will move into a transition phase, currently timed to end in December 2020, before which a new free trade agreement (FTA) would be negotiated.

East-west trade

This is when it gets interesting for trade on an east-west basis. An NI-only backstop would take care of cross-border trade on the island of Ireland, averting a crisis for dairy and sheep farmers in the North and allowing pig producers in the south continue sending pigs north for processing.

However, the future trading relationship with Britain is much less certain for farmers south of the border.

FTA not the same as customs union and single market

The special arrangement for NI gives the best of both in that it can continue trading with the rest of the UK without interruption.

However, depending on the FTA negotiations, there could be problems for Irish exporters to Britain through the ports of Holyhead and Fishguard.

An FTA is not the same as being part of a customs union or single market, which allow a complete free flow of goods, services, people and money between member countries.

With the UK outside this grouping, then border checks are inevitable. Even the most comprehensive FTAs, such as the one between the EU and Canada, involve border inspections, even if at a reduced level compared with other third countries.

Impact of future UK FTAs

Therefore, it is inevitable that even if agreement is reached this week in Brussels that the future for Irish trade with Britain will be more complicated after the transition period when a new EU-UK FTA comes into force.

Additionally, if Britain does embark on FTAs with other countries such as the USA, Mercosur, Australia and New Zealand, we can expect that these will include substantial access for agricultural produce, which in turn will devalue the British market, not just for Irish but UK farmers as well.

Getting agreement on a backstop will avert an immediate crisis for farmers and will solve inspection checks at the Irish land border.

However, while NI exporters will continue to have unhindered access to the British market as part of the UK, a future FTA is unlikely to have the same level of unhindered access for Irish exports to the UK.