Europe

How will Brexit affect Irish exporters?

Gerry Reilly
Image caption Gerry Reilly recounts how his business lost 20% of revenue "in one night" as sterling slumped.

The UK isn't the only country where the Brexit vote has changed everything and the implications for Ireland are difficult to overstate.

The UK's departure from the EU is the new prism through which politics, policy and business decisions are viewed.

Trade between the countries is worth a billion pounds every week.

Irish exporters are already having difficult times due to the weak pound.

On his mushroom farm near Athlone in County Westmeath, Gerry Reilly recounted how his business lost 20% of revenue in one night as sterling slumped.

The UK is the key market for mushroom producers in Ireland - each day 50 lorry-loads of the crop travel east across the Irish Sea.

'Great relationship on food'

Gerry Reilly said 52% of the mushrooms bought in the UK come from Ireland.

Image caption Workers pluck mushrooms from compost beds which stretch for 50 metres - and the produce will be on plates in Britain the following day

He is hoping that Brexit won't deal another blow to his industry, through the imposition of trade barriers.

"Ireland and England have had a great relationship on food," he said.

"It would be a terrible pity if anything would happen to make it more difficult or more costly."

His workers pluck tens of thousands of mushrooms from compost beds which stretch for 50 metres - and the produce will be on plates in Britain the following day.

Like many companies in the agri-food sector, margins are tight - and the UK export market crucial.

The ultimate effect of Brexit on exporters will be a major factor in how Ireland copes with the departure of its nearest neighbour from the European Union.

The Irish economy has been growing fast recently, having come through a disastrous financial crisis several years ago.

'Soft or hard Brexit?'

Image caption A "soft" Brexit would see a 2% drop in Irish economic output, compared to 4% in the event of a "hard" Brexit, says Prof Alan Barrett

Professor Alan Barrett, director of the Economic and Social Research Institute in Dublin, said: "One of the great frustrations about Brexit is that it could interrupt what is otherwise a very strong recovery from the difficult times of recent years."

Researchers at the ESRI have modelled the various different forms which Brexit might take, and assessed the potential impact on Ireland.

A "soft" Brexit would result in Irish economic output being around 2% smaller than it otherwise would be.

If there is a "hard" Brexit, the figure is 4%.

The Irish government has said it wants to protect firms who trade into the UK market and it believes Brexit may present opportunities.

IDA Ireland - the agency which promotes the country as an investment destination - has launched an advertisement campaign which flags up Ireland's 12.5% corporate tax rate, coupled with "100% commitment to the EU."

Dublin is not being shy about what it sees as its post-Brexit credentials for investors.

Eoghan Murphy, a minister in the department of finance, said Ireland can offer a solution to firms located in the UK who want access to the European single market.

"We're an English-speaking country, we're incredibly well connected to the UK, and we have the youngest population in Europe," he said.

He highlighted financial services as being one sector which could be particularly attracted to Ireland.

Image caption Eoghan Murphy says Ireland can offer a solution to firms located in the UK who want access to the European single market

When speaking about Ireland's role in the Brexit negotiations, Mr Murphy emphasised Ireland will be in the "EU 27" - the group states across the talks table from Britain.

He said he hoped 2017 will start with "less noise and hard rhetoric" compared to 2016, so that the negotiations can start "in a positive frame of mind".

Mr Murphy said Ireland's "strong and positive" relationship with the UK will continue - and he wanted trade to go on without excessive costs or burdens.

The terms of Britain's exit from the EU will probably affect Ireland's economy more than that of any other state.

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