Ireland battles impact of Brexit

February 08, 2021 08:40
Photo: Reuters

Of the 27 countries of the European Union, Ireland was the most opposed to Brexit. Since Britain left on December 31, it is the one most affected.

Car parts, electrical goods, furniture, clothing and food are sitting in warehouses across the country because of a shortage of agents to process all the paperwork required since January 1 to export them to the U.K.

The Freight Trade Association said the industry was struggling to keep the flow of goods moving because of a new pre-boarding notification system and new safety, security and import/export declarations. It has asked the Irish government for an adjustment period of six months.

This confusion has arisen because the EU and Britain only reached a trade agreement in late December 2020, giving companies no time to prepare for the detailed procedures needed to cover goods leaving the EU and entering the UK.

Britain is both an important export market for Irish goods and a land bridge to transport them to the EU. In the first 11 months of 2020, Ireland exported 59.12 billion euros worth of goods to EU countries and 13.3 billion euros worth of goods to the United Kingdom.

Up till the end of 2020, 150,000 lorries carried goods between Ireland and continental Europe via this land bridge each year. The travel time from Dublin to Calais in France on this route was 18 hours. But, since January 1, goods have to go through two sets of controls – entering the UK and then leaving it to enter the EU. This additional travel time and costs especially affects fresh food from Ireland being delivered to EU customers and vice versa.

To avoid this land bridge, shipping companies have rushed to increase services directly from Ireland to ports in France, Holland, Spain and Portugal. On these routes, the goods never leave the EU single market.

The port of Rosslare, in southwest Ireland, will have 13 sailings a week to EU ports in March, up from 11 now and three in 2019. While the journey time is longer, the truck driver sleeps on the boat, This means that he can drive a full shift immediately on arrival.

But Brexit has its upside for Ireland. Many UK and foreign law firms and financial institutions have opened new offices there in order to maintain seamless access to the EU market. It is now the only EU country with English as its principal language.

In December, the Irish Parliament approved new rules for the private funds industry. They aim to attract UK firms that have lost their “passporting” rights to sell investment products across the EU.

After Luxembourg, Ireland is the EU’s second largest fund centre, with more than 560 international managers selling products across Europe and Asia. They directly employ more than 16,000 people.

Pat Lardner, chief executive of Irish Funds, said that the new rules were game-changing in terms of Ireland’s global competitiveness. They are expected to attract private capital of up to 20 billion euros a year and 3,000 more jobs. Ireland is home to more than 250 of the world’s leading financial services firms and services over 40% of all global hedge fund assets. It is the fourth-largest exporter of financial services in the EU.

During the last two weeks, a new menace has arisen out of Brexit. Northern Ireland is part of the U.K. but has more than 200 border crossings with the Irish Republic to the south. At the insistence of the Irish government, the trade agreement lays down no hard border between the two. Goods and people can pass freely, as before Brexit.

Under the agreement, Northern Ireland remains part of the single EU market while still being in the U.K. Customs, health and other checks are carried on both sides of the Irish Sea. In the 2016 referendum, the people of Northern Ireland voted 56 per cent to stay in the EU and 44 per cent to leave.

But, on January 29, the EU Commission proposed overriding the protocol for NI to stop Covid 19 vaccines entering the region from the EU – thereby reimposing a land border. After strong protests from Dublin and London, the decision was rescinded within hours.

Three days later, checks on food and animal products in Northern Ireland ports were suspended after threats of violence against the officials carrying out the checks. Those making the threats do not want the border to be in the Irish Sea.

Senior British and EU officials will meet this week to work out a solution to how and which goods going from Britain to Northern Ireland should be checked.

The Good Friday Agreement of Belfast in 1998 has brought more than 30 years of peace. The two sides must work carefully together to preserve this peace and ensure that it is not threatened by the after-effects of Brexit.

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A Hong Kong-based writer, teacher and speaker.