5 reasons why a no-deal Brexit would be bad for Ireland
The talks on Brexit may still be ongoing, just about.
But so, too, is the worrying here in Ireland about the potential consequences of no agreement being struck.
That’s for at least five very good reasons, as the fallout could be extremely serious for Irish business and the economy.
Exports
If there’s no deal, among the biggest impacts will be on the more than €13 billion of Irish exports to the UK each year.
Up to €1.7 billion in import taxes or tariffs could be levied on those goods on arrival on British soil.
The agri-food sector would be hit particularly hard as 38% of that category of exports from Ireland end up in the UK.
Half of the cheddar cheese produced in Ireland, for example, goes to the UK and it would attract tariffs of up to 52%.
While Irish beef going to the UK market would be hit with tariffs of on average 74%.
That will mean that the total weekly bill for Irish beef going into the UK after a no-trade deal Brexit would be €8.5 million more than it is now, making it far more expensive for British consumers.
Imports
But not only goods leaving Ireland will be affected – many imports from the UK will have tariffs levied too.
Breakfast cereal, chocolate and processed foods are among a wide variety of products that could increase in price.
Ireland imports 4,000 tonnes of flour from the UK each week, and tariffs on that could increase the cost of a loaf of bread by 15 cent, for instance.
Raw materials brought in from the UK for processing here before being shipped out again as finished products may also suffer.
That could lead to those ready for market goods going up in price, making them less competitive in the countries they end up in.
The only way for manufacturers to get around this would be to source from elsewhere in the EU, but even this might come at a cost.
Direct purchases
For consumers buying direct from Great Britain there will be consequences too. Certain goods will face VAT and customs duty.
A sports good or piece of equipment priced at €167 for example, will end up costing €226 when all is taken into account.
That may, of course, have a positive spin-off, of inducing people to buy local more.
Logistics and supply chain
Regardless of a deal or not, new customs requirements will make it more difficult to get goods into and out of Ireland.
Big delays at ports in the UK, on the continent and in Ireland are expected as customs and other documentation is checked.
These will slow the transit of products across the so-called UK land bridge, increasing costs and slowing deliveries.
That could end up being a big problem for perishable goods, such as certain foods and high value pharmaceuticals.
Economy overall
Overall, the effect on the Irish economy of a no-deal is likely to be significant.
The Irish Fiscal Advisory Council estimates Irish GDP could be 6% lower over the longer-term, equivalent to €21 billion.
Up to 55,000 jobs could be lost, according to the Government’s contingency action plan.
While the Central Bank said over the medium term, 100,000 fewer jobs would be created in the economy.
Don’t forget, all this is coming at a time when the economy is already under severe pressure from Covid-19.
The stakes are clearly extremely high.
Article Source: 5 reasons why a no-deal Brexit would be bad for Ireland – RTE – Will Goodbody
