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What will a no-deal Brexit mean for Ireland?

This seems as a good time as any to talk about this.

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THERE ARE LESS than 60 days until 29 March, which is the date by which the UK must legally leave the European Union.

The EU 27 member states have approved the Withdrawal Agreement, which sets out the terms by which the UK will leave the EU. The next stage of negotiations – if we get there – would be about what its post-Brexit relationship would be (that includes trade, customs rules, etc).

But the UK parliament has rejected the Brexit deal, with many Tory MPs citing the backstop as their reason for doing so.

Therefore, if the EU sticks to their word that there will be no renegotiation of the Withdrawal Agreement, and the UK stands firm on wanting the backstop altered, then we’re in for a no-deal Brexit.

If this happens, it’s the worst case scenario for all countries involved. Here’s what it would mean for Ireland, based on what is predicted about an unprecedented situation.

Some things will be more expensive

In the event of a no-deal Brexit, at 11pm on 29 March, the trade relationship between the UK and the EU will shift from free trade and shared customs rules under the Single Market and the Customs Union, to World Trade Organisation tariffs which are the most basic trade rules.

The implied tariffs on UK to EU exports were published by Minister for Finance Paschal Donohoe this week: meat, cereals, sugars and sweets, tobacco, processed meat and fish, dairy, eggs, honey, and flour all have WTO tariffs of over 25%.

Switzerland Davos Forum Source: GIAN EHRENZELLER

Processed fruit and veg, animal feed, cocoa and chocolate, clothes and footwear all have tariffs of over 10%.

Customs checks would also add additional costs for goods being imported to Ireland.

“A lot of attention is being put on the cost of tariffs in the event of a no-deal Brexit,” says Shane Hamill, overseas trade manager with Bord Bia, “but not on the price of customs.”

At the DCU Brexit Institute event on Agrifood this week, he said that there could be a customs charge of €25 to €50 per consignment.

“Food and drinks products would have 100% ID checks and 100% documentation checks according to EU rules… physical checks would be carried out on 50% of dairy products.”

In short, this means that products coming from the UK will be more expensive. 

A government report found that “Ireland imports considerably more from the UK than any of the other EU-27… with this difference more explicit for imports than for exports.”

UK imports to Ireland account for 24% of its total imports, which compares with Ireland making up 13% of the UK’s total exports. The monetary value of those are narrower than expressed in percentage terms, though: imports to the UK are worth over $18.4 billion. 

Table brexit Source: Department of Finance

Tariffs will hit Irish businesses that rely on exports to the UK: by 2023, there would be an estimated 55,000 fewer jobs under a no-deal Brexit and the economy will be growing at a slower rate.

Medicines should be fine

The Oireachtas health committee heard this week that the HSE’s Brexit planning group has been putting contingency plans in place since 2017. The heads of a bill that would allow for a continuation of treatment abroad and cross border treatment schemes have already been drafted.

Department of Health Secretary General Jim Breslin said that the Health Products Regulatory Authority (HPRA) has been working to ensure the supply of medication is secure.

He said the pharma industry has assured the authority that it will have sufficient stocks to “bridge any initial issues” at ports. Breslin said there is no need for hospitals to increase orders or for doctors to issue any additional prescriptions.

A small number of companies in the UK that supply the Irish market have not yet made the necessary regulatory changes, but the HPRA has said it will have sufficient alternatives available in many cases.

And regulators here and in the UK are already putting systems in place to ensure qualifications for medical staff remain workable. After Brexit, the UK will be third country and workers will lose the automatic recognition of their qualifications in EU countries.

Breslin said the Nursing and Midwifery Board here will ensure applications from nurses trained in the UK will be dealt with in the current timeframe.

Planes are a grey area

Aer Lingus new branding unveiled Source: PA Wire/PA Images

Some flight operators could lose their licenses to fly in Europe if too large a proportion of the company is registered or based in the UK – including Aer Lingus.

Aer Lingus’ parent company IAG has been told this month that its plans to continue flying around Europe after Brexit won’t work. European carriers have to be 50% EU-owned and controlled to be allowed to fly within the bloc, which will be a struggle for the company.

IAG were going to cite trusts and companies to get around this, according to the Irish Times, but it’s not certain that this will get them the approval it needs.

In a statement to TheJournal.ie, IAG said: “We are confident that we will comply with the EU and the UK ownership and control rules post-Brexit.”

Meanwhile, London and Brussels are making contingency plans to allow UK carriers to continue flying to EU countries even if the draft withdrawal agreement is never approved – but these are bare-bones arrangements that do not allow British airlines to conduct intra-EU flights.

Tánaiste and Minister for Foreign Affairs Simon Coveney said that “a skeleton arrangement” would be put in place: this would ensure that planes could fly out of British airports by maintaining the safety certification beyond 29 March on a temporary basis.

“It becomes a much more different business model for non-EU aircraft coming out of the UK… it is not a pretty picture,” said Coveney.

Non-EU airlines flying from Britain would only be able to fly in and out, or point-to-point (this means they could fly to Paris and back to London again, but not to Paris and onto Madrid). That means fewer options for Irish consumers.

Phone charges will also change for the UK: if you’re near the border, be careful of extra roaming charges as the free roaming introduced through an EU directive won’t apply for those in Northern Ireland.

The border is even more grey

Brexit A defaced road sign welcoming motorists to Northern Ireland. Source: PA Wire/PA Images

For Ireland, the border area is the most confusing part of a no-deal Brexit.

The EU, UK and Ireland have all committed to avoiding a border, including in the event of a no-deal Brexit. But it’s difficult to see how this can be done if Northern Ireland and Ireland are two different jurisdictions in relation to customs checks and regulations.

But, in the European Commission’s published plans for a no-deal Brexit, it had this interesting line about animal checks between the EU and UK: 

“In case of no-deal, simplified border controls (limited to documentary checks, for instance) will apply to live animals and animal products coming from a Member State but transiting through the UK.

…every consignment of live animals and animal products coming from the UK would have to undergo, as of the withdrawal date, checks in Union border inspection posts (BIPs) at the point of entry into the EU.

The value of the EU’s Single Market is the high standard of goods being able to be shared between multiple countries – if a third country (ie, the UK) were able to introduce goods to that market below the standard that the EU deems acceptable, it taints it.

So this suggests that there would have to be some checks or infrastructure at the border; although MPs have suggested that checks could be carried out at the point of origin instead of at the border itself.

For the past year, the EU has been working on estimations for what different types of borders for the island of Ireland could cost, but weren’t willing to share the details of those costs. If there were to be a border, it would have to be built by Ireland and reimbursed by the EU, it is understood.

The Irish government has denied that there are any plans to build a border on the island of Ireland.

Revenue has also said that it’s not planning for customs posts along the border with Northern Ireland, but are preparing for a massive increase in import and export declaration forms.

It’s expecting an increase from 1.7 million last year to in the region of 20 million after Brexit. Land has also been acquired around Dublin Port and airports in order to prepare for additional customs and regulatory checks, if it comes to a no-deal Brexit.

There’s also a long list of legislation that will need to be passed in the event of a no-deal Brexit – other proposed bills will have to be put to one side to fast-track Brexit-related preparations.

- with reporting from Michelle Hennessy

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