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Why Brexit won't be as disruptive as feared

By Irwin Armstrong, founder and chief executive of CIGA Healthcare

Published 28/06/2016

David Cameron and wife Samantha before his announcement that he will stand down in September
David Cameron and wife Samantha before his announcement that he will stand down in September

Close to a quarter of a century since the Maastricht agreement created the European Union, a majority have finally got their wish to leave the EU, or at least get on the road to leaving the EU. The issue that has divided the country has finally been settled, but what does it mean for the future?

There will be little or no change for at least two years and probably longer as negotiations are carried out. The range of options is very wide, from no agreement at all and an adoption of the World Trade Organization (WTO) tariff system, that the USA and many other countries use, to some form of associate membership that could allow for free trade and a limited form of free movement of people between the EU and the UK, based on employment needs.

Since the UK was the second largest economy in the EU, a major financial contributor to their funds and their biggest export market it would be more likely that a balanced agreement would be reached that allowed for a two-way access to markets.

The impact on the relationship between the UK and Ireland is key to both countries as their economies and people are so inter-related. Both countries have made it plain that they wish the current Common Travel Area to be continued and it is unlikely that the EU will want to interfere with an agreement that dates back to the 1920s and has been ratified as recently as 2011. If this is the case, and the right of visa-free travel between the EU and the UK is implemented in line with current EU agreements, then there is no need for any checks on the border between the two parts of Ireland. Checks, as are currently the case, can be carried out at ports and airports between Great Britain and the island of Ireland.

The only change would be that work permits, in line with whatever agreement is reached, would be required for EU mainland citizens wishing to take up employment.

If customs duties are imposed, as nearly all declarations and payments are now done digitally, the only function of a border post is to check if duties have been paid and this could be done with spot checks and number plate recognition systems for registered hauliers.

The economy in Northern Ireland is currently heavily dependent on the public sector and needs to increase its private sector. Obviously if no agreement was reached on future EU trade it would be damaging to the growth of the private sector and foreign investment. As noted above neither Ireland nor the other EU 26 would benefit from taking punitive measures against the UK due to the current levels of exports to the UK. In fact, any punitive measures would have very serious consequences for the Irish economy, which exports 40% of its food and drinks to the UK. So without such punitive measures and enhanced opportunities outside the EU Northern Ireland remains well placed to benefit from increases in the private sector, both local and foreign.

The future outcome of leaving the EU would therefore be that if all parties act responsibly and logically in their own interests there will be no major changes in short term and very few in the longer term.

Belfast Telegraph

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