Belfast Telegraph

John Simpson: Businesses believe this is a Brexit compromise deal that will work

By John Simpson

The positive opinions of senior representatives of the business community on the prospects for a Brexit deal are an important corrective to the easy but misleading voices of the politicians.

The latter have not appreciated the careful and considered drafting of the deal to minimise and make the impact of Brexit acceptable.

For many businesses, the deal now on the table achieves what has seemed an illusory outcome: the best of both worlds.

Northern Ireland businesses have been slow to state the gains and/or risks that they are facing.

Quietly, senior managers have been well aware of the risks of no deal - the fear of the cliff edge of red tape, customs tariffs and a very segmented market place.

There has been a greater understanding of the motivation, for Northern Ireland-based businesses and businesses based in the Republic of Ireland, of the UK and EU negotiators' efforts to minimise the scale of economic disruption that might come with a harsh, ill-considered Brexit.

The local business organisations accept that the draft deal is 'by no means perfect'. However, it is 'a welcome step forward'.

As an initial assessment this is encouraging and counters some of the misplaced hectoring.

Managers who want to see the economy protected deserve to be allowed to influence decisions that will affect jobs, living standards and skills. Their collective voice is a critical addition to the democratic processes.

Accepting the deal now proposed by the UK and EU will provide a working base on which businesses can plan more sensibly for production, exports, investment and greater innovation.

The nature of Brexit means that some of the threats to business and employment will remain, but the threats will be much smaller.

The relative attractions of a business based in Ireland, relative to the UK, have been enhanced by the very process of Brexit.

However, a managed deal, minimising or removing a trade and services border on this island, will be an important partial corrective.

There is a price to secure the best of both worlds for Northern Ireland. Goods exported from Northern Ireland to GB would proceed as now. Goods exported from Northern Ireland to anywhere in the EU of 27 states would be accepted as from within the internal EU market, so long as they met the regulatory standards of the EU.

Starting in 2018/19, those regulatory standards already apply. Change in those standards is a considered and infrequent event.

For most exporters this commitment - admittedly to standards reviewed by the EU - will be modest and well publicised.

With straightforward anticipation, Northern Ireland exporters will have the advantage of tariff-free access to GB and the EU.

The so-called border in the Irish Sea will be a series of some checks that goods landed in Northern Ireland, with acceptable UK standards - but lacking EU standards - do not find a 'back-door' into the EU through the Republic of Ireland.

The extra degree of business administration as envisaged by the UK-EU deal should be small and very acceptable as a method of protecting Northern Ireland business.

The business organisations have now made a clear and overdue statement that the draft UK-EU deal is a worthwhile compromise.

John Simpson is an economist

Belfast Telegraph

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