Why Brexit would be bad for trade between Britain and Ireland

On Thursday, people voting in the UK referendum on EU membership will decide whether to leave or remain in the EU and we should be rightly concerned if they leave. The UK is Ireland’s largest trading partner, with more than €1.2 billion of goods and services traded between us every week, directly supporting 400,000 jobs on both islands and even more among suppliers and surrounding communities.

Even local businesses are not immune to UK trade as importers and exporters employ local staff who spend locally. We’re so joined at the economic hip that, when the UK economy grows by 1 per cent, we grow by 0.3 per cent as a result. But the reverse is unfortunately true as well.

Businesses want to do more trade, not less; and to create more jobs. All other things being equal, Britain’s exit from the EU would mean higher costs and prices by making it harder to hire the required skills and import raw materials. It would also result in fewer sales on account of tariffs and other barriers. This has to mean less incentive to invest and to create job growth which sustains out communities.

Unfortunately, Ireland will not be able to do its own deal with Britain or Northern Ireland, much as we all might want that. Any deal would require the unanimous agreement of all the other 26 EU member states and many will have little interest in Ireland's unique relationship with the UK.

Nationally, there are no sectors not affected in Ireland. It’s not just about our big urban industrial centres – when industries as important as food and tourism are damaged, every part of the country loses out. We face particular exposures in the food/agribusiness sectors because the UK and Ireland are each other’s largest export customers for food. Average EU tariffs on beef imports from a non-EU country are 70 per cent and dairy is penalised by 36 per cent. Add in an effective price increase passed on through a collapse in sterling and you have serious threats to our competitiveness.

In tourism, just when everybody’s good work is paying off; a currency-driven price increase is clearly not welcome.

The biggest issue is uncertainty. We still don’t know what kind of “Leave” the UK will want. Most of the Leave campaigners agree that the UK will want access to the Single European Market but the different factions want different versions, from the Norway solution to Switzerland to Canada and more.

In reality, there is no such thing as free trade agreements with any other EU country outside of EU membership, only Conditional Trade Agreements that require free movement of people, payment into the EU budget, tariffs on the most important trades and agreeing to EU regulations. Which is exactly what the Leavers say the UK should Leave to be freed from!

Freedom needs rules to avoid abuses and inequality. Even those who ignore the certainty of tariffs on the UK’s trade with the EU say they should still Leave anyway to escape from Europe’s rules. Which rules exactly? The ones that give people fair workers’ rights like paid holidays and maternity leave? Like safety and a sustainable planet? Like lower costs for energy and for travel across 28 countries? Like reduced charges for phoning home and for transferring money? Like the rules that allow students to learn in any EU college and then use their qualifications in any EU country? Even the Leave campaigners acknowledge that the UK would still need to make similar rules to all these at home and to comply with them when travelling or trading abroad.

The UK has already won its battles to get the form of EU membership that its people want, so it can enjoy all the benefits with less of the drawbacks. Since 2011, Britain has had a Referendum Lock preventing transfer of further powers to Brussels without the consent of its people. This year the EU has offered the UK the right to keep full free access to the Single Market, but to abandon any idea of “ever closer union”, to be protected from any moves to strengthen the euro, to reduce red tape and to reduce the incentives for other EU workers to move to the UK.

The situation is already clear: without any benefit whatsoever, the costs of a potential exit to everyone in the UK has already started in the shape of reduced economic activity, job creation and inward investment, a collapse of the pound and reduced returns to UK pensioners from a weakening UK investment market. Those who claim the other 27 member states will reverse all that for the UK people with some new deal, have clearly no experience of negotiation.

Most regrettably, including for Ireland’s interests, there is no rational reason for the EU to encourage any other state to follow the UK Leavers’ “leadership” over the edge of a cliff. And almost half the UK population, including most in Scotland, Wales, Northern Ireland and London, will have fair cause to question in whose name is all of this being done?

The EU needs to be reformed and to continuously adapt in order to become the locally effective and globally competitive consensus between like-minded peoples that it can be, delivering real benefits for every one of its citizens. As it has proven in the past on issues such as the single market and enlargement, and on the wider global stage, the UK is strong and self-believing enough not to Leave, but to Lead the vital work to realise those benefits for all.

A vote for Remain will be a vote for the future potential of British and Irish trade and prosperity over austerity.

John McGrane is Director General of the British Irish Chamber of Commerce and a Council Member of Dublin Chamber of Commerce. He works extensively with businesses in the UK and Ireland and with State agencies.