Home > Ireland > Ireland is EU member most exposed to Brexit

Ireland is EU member most exposed to Brexit

Written by Business World, on 28th Dec 2020. Posted in Ireland

article headline

Taoiseach Micheál Martin expressed relief on Thursday after neighboring Britain agreed a last-minute trade deal with the European Union which he said was the "least bad version of Brexit possible."

Ireland, the EU member state most exposed to the fall-out from Britain's departure, was an important player during four rocky years of exit negotiations in which it sought to shelter its highly exposed agricultural sector and avoid a hard border infrastructure with the British region of Northern Ireland.

"There is no such thing as a good Brexit for Ireland, but... I believe the agreement reached today is the least bad version of Brexit possible, given current circumstances," Martin said after Britain and the EU announced the deal.

While Irish firms have diversified into new markets since 2016, cutting trade to Britain to 9% of total Irish goods exports last year, its nearest neighbor still accounts for around one-third of its food and agricultural exports.

That sector would have been battered by heavy tariffs if Britain had left the EU on World Trade Organization terms. Ireland's large beef industry, which sells almost half of what it produces to Britain, would have been subject to tariffs of 72%.

Preserving the delicate peace in Northern Ireland without allowing the United Kingdom a back door into the EU's single market through the 310-mile UK-Irish land border was one of the most difficult issues during the first phase of talks, which culminated in the Withdrawal Agreement in late 2019.

The British government angered the Irish government by threatening to unilaterally scrap elements of that deal, but withdrew the threat as the outline of a trade deal emerged in recent weeks.

"The peace process had been protected, peace funding has been protected, Ireland's place in the single market of the EU has been protected," Irish Foreign Minister Simon Coveney told RTE radio.

While Ireland's large pharmaceutical and multinational tech sector has shielded the economy from the worst of the COVID-19 crisis, around 20% of its workforce is now permanently or temporarily unemployed. That means it could ill-afford what Martin said could have been a second "appalling" economic shock from a "no-deal" British exit from the EU.

Ireland based its budget for 2021 on the assumption that the talks would fail. A deal could add 3-4 percentage points to the finance department's gross domestic product forecast range of +1.7% to -2.1% for next year, Finance Minister Paschal Donohoe said at the time.

"Businesses in Ireland and across the UK can breathe a collective sigh of relief today," the British Irish Chamber said in a statement. (Reuters)

Source: www.businessworld.ie

More articles from Ireland

image Description

Irish deal making in 2020 falls to lowest level since 2009

Read more
image Description

COVID-19 delaying home buying plans for almost half first time buyers

Read more
image Description

Bleak start to 2021 for Dublin businesses

Read more
image Description

Enterprise Ireland sets out strategic priorities for 2021

Read more
image Description

Second COVID-19 lockdown had smaller impact on GDP

Read more