Despite Brexit, Ireland encourages business with UK
By Andy jalil – Foreign Correspondent — Ireland has had a long business relationship with Britain as well as close family ties between the people of the two countries and an open border and that is not likely to alter much, if at all, as a result of the referendum for Britain leave the EU.
Looking at it purely from a commercial point of view, it is strongly felt in Ireland that businesses shouldn’t turn their backs on the UK despite the Brexit vote.
Enterprise Ireland (EI) has said that there exits potential opportunities for business in various sectors in the UK including the National Health Service (NHS), the water market and the Northern Powerhouse agenda for which there has been ambitious plans both of the former chancellor, George Osborne and indeed by the former prime minister David Cameron.
The positive argument in Ireland is in contrast to the repeated warnings about the harmful effects of a weakened pound and concerns over the health of the British economy.
Although it is also felt that it is early days to draw conclusions on how the economy would fare in the long run. EI said companies in Ireland would be missing out if they opted to look away from the British market despite the fallout from the June 23 vote.
EI’s UK and Northern Europe Director, Marina Donohoe, in an update provided to the agency’s client companies said: “Despite understandable concern over the UK’s vote to leave the EU, our nearest neighbours will remain a natural first market for Irish exporters due to proximity, a shared language and similar business cultures.” She added: “While strategies to offset whatever consequences arise from the UK vote are advised, businesses in Ireland would be missing a trick if they discounted the UK market.”
The agency pointed out seven potential opportunities, including the UK’s National Infrastructure Delivery Plan, the Northern Powerhouse agenda which has so much expansion plans and business encouragement, the Scottish government Investment Plan, the NHS’s ‘Five year Forward View’, the water market, financial services and aerospace.
But despite the positive intervention, Irish businesses are likely to be cautious — at least in the short term — with data released this week showing retail sales in the UK fell at the fastest pace in more than four years in July, signalling wariness among consumers.
The Confederation of British Industry (CBI) said its monthly retail sales index dropped to minus 14, the lowest since January 2012, from 4 in June.
A gauge of the outlook showed stores anticipate a similar decline in August.
Chief economist at CBI, Rain Newton-Smith, suggesting the drop may be a short-term reaction to the vote, said: “While conditions in the retail sector have weakened, we should be careful about reading too much too soon, as consumers were likely to err on the side of caution in the immediate period following a vote
to leave the EU.”
Irish businesses are being urged to think long-term. Donohoe’s comments are contained in a guide sent to EI client companies on strategies to adopt in the wake of the Brexit vote. It focuses on the need to hedge and to have a business
plan in place.
The agency’s Chief Executive, Julie Sinnamon said EI is advising companies to look for new UK opportunities, as well as diversifying
into new markets.
“But contingency plans and near-term responses to the UK vote are needed. The legal status of contracts, currency risk management, tariffs, staffing and supply chain are among the matters exporters must consider,” Sinnamon said.
Business representatives in Ireland are concerned that the UK trade minister Liam Fox’s proposed changes in tariffs on goods movement would be detrimental to Irish trade affecting Anglo-Irish relations and could add up to 25 per cent to the cost of business as well as delays to cross border trade.
Looking at the legal implications of Brexit, Sean Ryan, a partner at law firm, Evershed, said that certain areas of business including trading laws, employment and competition laws are likely to be impacted.
But to what degree remains unknown at this stage.“There has been much talk about what the UK’s future trading relationship with the EU might look like. Will it be Norwegian model, the Swiss model, or maybe even the World Trade Organisation model? The truth is, nobody knows,” Ryan said.— firstname.lastname@example.org