Head of Brexit research outlines trading implications of Brexit at Irish Centre for European Law event
28 June 2017 – The Head of Brexit Research and Support Services at the British Irish Chamber of Commerce has warned the future of UK-Ireland trade is “wrought with challenges and uncertainty” as the exact impact of Brexit is as yet unclear. The comments were made by Katie Daughen during her address to the Irish Centre for European Law (ICEL) Brexit Series – Implications for Trade on the island of Ireland held in Dublin today.
Delivering an address entitled “Brexit: The challenges for trade as we face an uncertain future”, Ms Daughen outlined the importance of the UK to the Irish economy, most notably to the SME sector stating: “The UK is Ireland’s most important two-way trading partner. Ireland exports 16% of its goods and services to the UK while we rely on the UK for around 27% of our imports. The importance of the UK market to Ireland is even more significant when looked at in the context of our indigenous firms who rely on the market for 50% of their exports.”
Highlighting the agri-food sector as being particularly vulnerable to the Brexit outcome, Ms Daughen warned that all businesses trading with the UK will be affected should the UK leave the Customs Union. She stated: “Much of the discussion so far around future trading has focused on tariffs and while many of the main commodities traded between the two islands, most notably in the agri-food sector, might attract substantial tariffs, all who trade with the UK will incur additional costs due to non-tariff barriers. According to the OECD the non-tariff costs of trading across a border can lead to a 24% increase on the cost of a transaction.”
Brexit poses a particular challenge to all-island trade and could result in a decline in cross-border trade. In referencing a recent InterTrade Ireland report Ms Daughen said: “Trade into Northern Ireland could reduce by 14% while trade from Northern Ireland could reduce by 19%. With the potential currency exchange rate change these figures change to 21% and 11% respectively, resulting in a loss of trade of nearly half a billion euro.”
Discussing the economic impact of Brexit in the UK, the Chamber’s Head of Brexit Research said: “Brexit is already starting to bite in the UK economy. Wages are stagnant, growth in retail sales is at its lowest level since April 2013, producer price inflation currently stands at 11.6%, while the consumer prices index is at 2.9% – the highest rate since April 2012” before stressing that businesses previously quiet on the issue are now beginning to submit their Brexit demands to the UK Government.
While advising businesses to “prepare for the worst possible scenario” she also said “I am slightly more optimistic that a softer approach might ultimately be pursued. While the Conservative Party are still reading from the same script as before the election, I do think at some point the new political reality will have to come into play.”
Finally, Ms Daughen said: “Businesses now have a greater opportunity than ever before in this process to have their voices heard. The Irish and UK Governments, and the diplomats supporting them, deserve credit for achieving priority status for the Ireland / Northern Ireland situation in the negotiations. They now deserve the support of the business community to ensure that negotiation ready solutions are found to make certain that all barriers to trade are avoided.”
To read the full speech, please click here.
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