Quitting single market a body blow for Northern Ireland trade with Republic, warn experts
Leaving the single market will hinder barrier-free business between Northern Ireland and the Republic, experts have claimed.
Theresa May yesterday revealed the UK would leave the single market, explaining that she would negotiate a new customs union deal following the Brexit process.
The Prime Minister also said she wanted the UK and Ireland to retain the common travel area and signalled she would work to agree some form of free-trade deal.
But business groups maintained that uncertainty remained around the impact this would have upon cross-border trade and cautioned that the negotiations process could take years.
Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce, said it was crucially important that a renegotiated customs union comes "without costly customs checks and administrative costs for businesses, which would pose a threat to Irish cross-border trade".
"A negotiated UK-EU free-trade agreement will not go far enough in meeting the concerns of our members," Mrs McGregor added.
Aine Brolly, chief executive of recruitment firm Cpl Solutions International, warned that issues around the customs union and the single market had "the potential to significantly impact the labour market... notably how we recruit and attract the talent we need to continue on the upward economic curve we have seen over the last number of years".
Angela McGowan, regional director of the CBI in Northern Ireland, said that "ruling out membership of the single market has reduced options for maintaining barrier-free and tariff-free trading relationship between the UK and the EU".
"Given the importance of the EU to NI exports, the significance of leaving the single market is an important issue for the local economy," she added. "While local businesses want to make a success of Brexit, there are undoubtedly concerns about falling back on damaging World Trade Organisation rules."
Mrs May said she hoped to retain "freedom for financial services across borders" - something that could be significant for back and middle office jobs in Belfast at international firms including Citi.
"Businesses in Ireland are no further advanced in understanding the issues that will need to be dealt with at the conclusion of this process", according to Ian Talbot, chief executive of Chambers Ireland.
Following Mrs May's announcement, the pound was yesterday heading for its best performance in several years, but the FTSE faltered.
There also remain significant concerns over leaving and negotiating a replacement for the customs union, said Lisa Wilson, from the Nevin Economic Research Institute.
"For the Northern Ireland economy, leaving the customs union will bring with it a more immediate and visible barrier to trade on the island of Ireland as this will inevitably lead to the re-establishment of customs checks on the land border with the Republic" she added.
The decision for a hard Brexit by Theresa May is "clearly not good news for Northern Ireland, nor the border with the Republic, despite vague assurances around no return to the borders of the past", said Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association.
Aodhan Connolly, director of the Northern Ireland Retail Consortium, however, welcomed the Prime Minister's announcement that workers from the EU already in the UK would be allowed to stay.
Countries within the customs union that are not part of the EU or single market include Turkey.