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Why Dublin and the UK must maintain their links

More than two months after the vote to leave the European Union, we take a look at the consequences for British-Irish relations, corporate deals and Londonderry's airport

Published 30/08/2016

Prime Minister Theresa May and Taoiseach Enda Kenny
Prime Minister Theresa May and Taoiseach Enda Kenny

It almost feels as if nothing has changed since the UK referendum on EU membership. You can't (yet) hear the job losses or see the disinvestment. But all is far from well. In the weeks since the referendum, the pound has collapsed, UK property values have declined, new investment and recruitment have stopped, farming has no certainty of EU funding and UK universities are losing core research funding and talent.

Brexit means Brexit, but what does Brexit mean? Whether the solution is to be the Norwegian, Canadian or any other model, it seems certain that the context for Britain's negotiations with the other 27 EU member states is about to change from calm to seriously troubled. Job losses, business disinvestment and the resultant pressure on politicians will change the phoney war to real pain for the most vulnerable.

And in Northern Ireland, which costs Britain more to subsidise annually than the UK's cost of being a member of the Single Market, it seems the opportunity to prosper from economic advantage has been squandered.

Instead of benefiting from reducing business and travel taxes, Northern Ireland's latest competitiveness metrics show it has plenty of real challenges apart from its border.

And all for what? If the referendum was about migration, the truth is the UK clearly needs employees from the EU. The clothing industry, for instance, relies on eastern EU seamstresses working in England just as much as on talented young British designers and Italian fabric makers.

The car industry, food, finance and construction all clearly rely on 'foreign' EU workers and access to a market over eight times bigger than the UK itself (plus access to global markets via the EU's trade agreements).

Nothing exists today without interconnection to other markets. Even the iconically 'British' Bentley starts its life in Bratislava, gets a German engine, is finished in England with chrome trim made in Westmeath and is sold to customers all over the world using finance assembled in Dublin's International Financial Services Centre.

Indeed, the British motor industry exports 80% of its cars, mostly to the EU.

It needs thousands of EU workers to operate and it imports 40% of its raw materials from the EU. Barriers to workers or tariffs on both its raw materials and its exports will inevitably cause widespread job destruction.

In reality every EU country has legitimate rules to control its 'free' movement. So, given the waste, pain and loss by delaying, shouldn't we end the phoney war and move at speed to agree, as we inevitably will?

In Ireland, whose 'skin in the game' was rightly declared and acknowledged from the very start of all of this, we need to do just three clear things. We must recognise that a bad outcome for the UK would also be a bad outcome for Ireland.

Irish exporters are painfully challenged by a 20% fall in sterling (let alone the potential demise of some of their UK customers). In the recent survey by the British Irish Chamber of Commerce which assessed the distinct reactions of both exporters and importers, it was encouraging to see that some Irish exporters are already investing in new markets.

However, those same exporters will tell you this is slow, expensive, difficult and less valuable than their UK business.

The same survey highlighted that business is inherently pragmatic and resilient but what it needs is early clarity of market rules and joined-up collective planning t

But we must also work on making the best of the EU. If we didn't have the EU we'd have to invent it. We need it for trade, to create more jobs than we can on our own by doing business across the EU as easily as we do at home.

But we do need to ask why European Union-based employers have to certify the same product in 28 different EU countries when they only do it once in the US. We should address why some EU countries invent local barriers to keep out imports from fellow member states.

And most crucially, it has never been more important for the UK and Ireland to work together. Independent of EU/UK negotiations, an early renewal of the 2012 declaration of business co-operation between the UK and Irish governments will be the right next step.

That 2012 accord paved the way for joint marketing of UK/Irish tourism, aviation finance and healthcare.

Above all, we should clearly reaffirm the genuine trust and mutual regard which has characterised the contemporary relationship between the peoples of the United Kingdom and Ireland.

John McGrane is the director-general of the British-Irish Chamber of Commerce

Belfast Telegraph

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