Brexit: UK trade 'difficult if Irish border unresolved'

By John Campbell & Shane Harrison
BBC News NI Economics Editor and BBC News NI Dublin Correspondent

Image source, EPA
Image caption,
A no-deal Brexit will cause the UK "enormous difficulties", says Leo Varadkar

The UK will find it "very difficult" to do trade deals after Brexit if it has not resolved the Irish border issue, the Irish prime minister has said.

Leo Varadkar said that by contrast Ireland would continue to benefit from the EU's trade deals.

He said: "In a no-deal scenario, the UK won't have any trade deals with anyone.

"I think it will be very difficult for them to conclude any trade deals with the question of the Irish border unresolved."

Speaking at the World Economic Forum in Davos, Mr Varadkar said the solution to the border was to ratify the deal agreed between the UK and the EU.

He again said that if the UK leaves without a deal the EU and Ireland would still want an agreement with similar provisions as the Irish border backstop.

The backstop is effectively an insurance policy to avoid a return to a hard border between Northern Ireland and the Republic of Ireland, if no other solution can be found through a wider trade deal with the EU.

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What happens in the event of no deal?

"I think we would end up in a situation where EU and Ireland and the UK would have to come together and in order to honour our commitment to the people of Ireland that there be no hard border, we would have to agree on full alignment on customs and regulations," said Mr Varadkar.

"So after a period of chaos, we would perhaps end up where we are now, with a very similar deal."

No plan for border posts

In Dublin, the head of the Republic of Ireland's tax authority said that officials are not planning for customs posts along the Irish border.

But Niall Cody, the Revenue Commissioners' chairman, said there would have to be intensive consultations with the European Commission to decide what would happen.

Image source, PA
Image caption,
Brexit will have "significant cost implications" for agri-business, says Niall Cody

Speaking to the Irish parliament's finance committee, he said the authority was recruiting more staff due to the possibility of a no-deal Brexit.

"We are on track to have over 400 additional staff in place by the end of March," he said.

"We have reassigned serving staff, are preparing for any necessary further redeployments on a temporary basis, and will have the balancing complement of additional staff recruited by the end of 2019."

Mr Cody indicated that a lot of customs work would be done online with officials making occasional visits to businesses and factories.

He said he disagreed with Brexiteers who have claimed that there will be no dramatic change to the border if the UK leaves the EU without a deal.

There would be "significant cost implications" for businesses, particularly in the agriculture sector, he added.