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Northern Ireland

Maintaining close bond of UK and Irish businesses 'Imperative' after Brexit

03 Nov 2017
brexit

The ‘soft’ boundary between Ireland and Northern Ireland is the sole land border between the EU and the UK. In many ways, the border is arguably the most obvious example of deep economic and trade integration between the UK and the EU.

However, the future of the relationship between the two regions is now uncertain due to Brexit. The UK has voted to leave the European Union but – publicly at least – it isn’t clear how it will leave. Many would argue that the most material impact of Brexit will be on the border between Ireland and Northern Ireland. Each region is deeply economically integrated into the other.

The 499km land border between the UK and Ireland has historically been an open one with 30,000 people crossing the border each day. Economic and trade links between Ireland and the UK account for €60 billion (£54bn) annually and supports 400,000 jobs. The business community believes it is imperative to maintain this close bond for trading purposes. Almost one-third of IoD UK members have business links (including supply chains, sales and employees) with Ireland, while three-quarters of IoD Ireland members have business connections with the UK. The significance and value of the special relationship – and the importance of it for both sides – is clear.

The Article 50 negotiations may be the most complex trade talks ever carried out and the dealings between the two sides have proved tense on more than one occasion. However, it is encouraging that both parties have expressed the need for flexible and imaginative solutions for this difficult aspect of the talks. Irish Prime Minister Leo Varadkar has called for “unique solutions” to the border.  Still, talk of a ‘no deal’ scenario persists, and the Government has been unable to provide clarity on whether or not it has indeed budgeted for this consequence.

Promisingly, the UK and the EU have similar objectives that guide their work on this issue. In their respective documents explaining their approach to the Irish border, the UK and the EU have cited protecting the Good Friday Agreement, maintaining the Common Travel Area and avoiding a hard border between Northern Ireland and Ireland are common goals. Furthermore, each side has recognised the soft border between Ireland and Northern Ireland has played a critical role in economic prosperity and security in the area. It is for this very important reason that the unique relationship should be preserved.

Supporters of free trade would undoubtedly be pleased with a barrier-free border between the UK and Ireland; some might reason that Brexit means Brexit. There are of course practical questions of how a ‘frictionless’ border can be so, but there are also ideological questions, such as whether having a seamless border is in fact congruous with the democratic vote to sever ties with the EU. EU chief negotiator Michel Barnier has said unequivocally: “Frictionless trade is not possible outside EU rules”.

The unique case of the UK and Ireland border means there is no precedent that can serve as a possible model for a solution. At this stage of the negotiations it’s safe to say that if there was an easy way to resolve the Irish border question, the talks would not be so difficult. 

In view of developing a solution, it is helpful to deduce what we do want from the future British-Irish trading relationship. 

With everything up for negotiation, economic ties between Ireland and UK should remain as open as possible after Brexit. Without this pledge, firms in Ireland would have the capacity to trade freely with countries as far away as Canada, but not with their nearest neighbour just across the border. Indeed, if this were to happen there would be dire consequences would for trade and employment in Northern Ireland.

At this confluence in the British-Irish relationship, the IoD calls on the UK and the EU to ensure trade after the UK has exited the EU is as barrier-free as possible.

As we edge ever closer to the March 2019 deadline, the business community is itching to see what economic ties will look like in a post-Brexit world. While this may prove an incredibly complex and challenging task for negotiators, the IoD is pleased to work with policymakers to ensure this happens. It is our view that long-term prosperity and economic success is one objective that all sides can agree on.


By Ian Sheppard, Chairman, Institute of Directors (IoD) Northern Ireland

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Northern Ireland

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