Theresa May's speech at the Conservative party conference last weekend may prove to be a defining moment in the process of Britain's withdrawal from the European Union.
Three months after the British referendum, May had been in danger of allowing a vacuum to build up around Brexit, running the risk that her silence on the matter would be perceived as weakness.
On Sunday, however, she defied her critics and exceeded the expectations of her most Eurosceptic party members by indicating her support for a so-called “hard Brexit”.
May’s assertion that the UK will control who comes into the country from the EU, coupled with her promise that it would no longer be bound by the European Court of Justice, appears to rule out participation in the single market.
By signalling that she will prioritise immigration over the common market, she is steering her country towards a looser relationship with the EU than many had hoped for.
The clarification of the British government's negotiating position has deepened Irish concerns. Judged by a range of metrics, Ireland is the most exposed of all member states to Britain's imminent EU departure.
Irish exports
About 16 per cent of Ireland’s exported goods go to the UK, by far the highest percentage of any European country. (The
Netherlands
,
Belgium
,
Germany
and
France
are also large exporters.) The agrifood sector and indigenous Irish firms are particularly dependent, with almost half of Ireland’s food exports going to the UK.
Similarly, about 20 per cent of Ireland’s international trade in services is UK-dependent.
The prospect that Britain will not be part of the single market or customs union raises serious questions about the Border arrangements between North and South, as Ireland becomes the site of the UK’s only land border with the European Union.
It is for this reason that Ireland needs to be front and centre at an EU level in the forthcoming negotiations on Brexit.
While there is much sympathy from Ireland's EU partners on the Border issue – officials across Europe are mindful of the uniquely sensitive situation regarding Northern Ireland and will be unwilling to endorse any deal that jeopardises peace. However, there will be no special deals for Ireland on trade.
Like all EU member states, Ireland in effect surrendered control of its trade policy when it joined the EU. Once negotiations begin next spring on article 50, Ireland will be one of 27 countries trying to hammer out a deal that will benefit the EU collectively.
In this sense, Ireland is likely to find itself aligned with countries with the most economic exposure to Britain. These will include export-led economies such as Germany and the Netherlands, which will be keen to protect their own economic interests. But there are a significant number of EU member states for whom a close trading partnership is less important than protecting free movement.
Central and east European countries whose citizens and economies have benefited from the right to live and work in the UK will resist any moves to curb free movement.
Less exposed
These are also the countries that are least exposed to Britain in terms of exports.
One senior official from a central European country recently remarked that he would be more concerned by a flare-up in the Greek crisis or the continuing effect of sanctions on Russia than Britain's exit, given the minimal trade between his country and Britain.
Instead, the EU collectively will be keen to send a message that Britain cannot get a special deal that allows it to benefit from single market access without the obligations of EU membership, for fear that it would encourage other member states to hold similar referendums.
European Council president Donald Tusk has signalled that he will take a tough negotiating line, reiterating this week that the EU will work to "safeguard its interests" once negotiations begin.
Ultimately, the EU holds the stronger hand. While the bloc represents about 44 per cent of Britain’s export market, the EU collectively sends only about 16 per cent of its exports to Britain.
For Ireland, the crucial challenge over the coming years will be to secure as close a relationship with Britain as possible post-Brexit. This will require strong efforts by Ireland’s 85-strong diplomatic team in Brussels, as well as political leadership from the Taoiseach.
Following the general election, much was made of Enda Kenny’s long-standing relationship with senior EU leaders, particularly through his membership of the European People’s Party.
The time has now come for Kenny to utilise his contacts with senior EPP figures, such as Jean-Claude Juncker and the commission's Brexit negotiator, Michel Barnier, in order to ensure that Ireland's voice is heard around the EU table.