The latest poll of UK voters shows that 39% favour staying in the EU and 39% favour leaving, so there is an even split at the moment , with just over 2 months to go to the referendum.
Regardless of what happens in the end the uncertainty is already damaging some of our hard achieved recovery. Last November the euro slump to under 70p sterling gave exporters to Britain a much welcomed boost, but now, with so much uncertainty and speculation flying around the euro is surging against sterling reducing the competitiveness of Irish exports.
Ireland exports goods worth €14bn and services worth €20bn to the UK. Our main exports are:
- Computer services €6bn
- Financial and Insurance services €5bn
- Transport Services €4bn
- Food and Drink €4bn
- Pharmaceuticals and Chemicals €3.5bn
- Manufactured goods, machinery and transport equipment €3bn
- Other business services €3bn
We import €30bn worth of goods and services.
Most expert groups now agree that there could be serious consequences for Ireland if Brexit happens. Forecasts include:
- Trade between Ireland and the UK would be reduced by 20%
- The value of sterling would decrease further almost to the same value as the euro, raising the price of exports but making imports cheaper.
- Renewed border controls would make it more difficult for Irish companies to break into UK markets and would make Ireland less attractive to multinationals to operate in.
- North- South issues could be effected and there could be a hay day for smugglers. But opinions still vary on the necessity of a North-South border.
- Irish farmers could lose up to €800m a year in beef and dairy exports, as 50% of these products go to the British market. In a post Brexit scenario the UK could allow more and cheaper imports from South America and New Zealand.
Of course not all negative effects will inevitably happen. Ireland has always had a special relationship with the UK and arrangements to mitigate the worst effects of Brexit could be put in place. But our government and state agencies need to be very proactive in ensuring the best possible outcome and the delay in forming a government is not helping. Making arrangements with the UK for trade and free movement is crucial but also we need to be looking further afield for new markets to reduce our dependency on the UK. This is of course already happening to some extent as we now trade more with the EU, USA and the rest of the world than we do with the UK.
How would Wexford be affected?
The UK is a very close neighbour indeed to Wexford, in so many ways. Its proximity and ease of access through Rosslare has made it an almost natural hinterland. So many people have gone to live and work in the UK over the generations that coming and going to the UK is not really considered going abroad.
Therefore it is only natural for Wexford businesses to think of the UK as their first expansion out of Ireland. They can dip their toe in the water so to speak fairly easily without having to cope with too many transportation or cultural differences to overcome.
Wexford’s SMEs, struggling to grow their companies will likely be the worst affected in the event of Brexit, and especially those in the food and agriculture sectors.
While food and drink may not be our largest exports, this area is the most vulnerable, especially the many small, high quality food producers we have in Wexford. The Wexford Food Family was set up in 2011 to promote Wexford as a food brand locally, nationally and internationally, and listed 34 members ranging from one person operations to large exporters.
Wexford has several multinationals operating in the areas of engineering, medical technology, and ICT, and it is to be expected that these would be more resilient to any changes than our smaller indigenous companies who are still only finding their feet after the recession. Just when things are looking up Brexit could be a stumbling block to recovery.
If freedom to travel for work was to be affected it would impinge on the many Wexford people who travel to the UK for work, or companies who contract work in the UK.
The one possible upside to Brexit would be the possiblilty that more multinationals at might look at Ireland as a base to gain access to the EU, but the UK is already moving to lower its corporate tax rate and planning to make the most of its freedom from EU regulations on state aid and business incentives to draw multinationals to Britain.
It is expected that any benefit Ireland would get from relocation of multinationals’ activity would largely be centred in Dublin, so Wexford needs to promote itself as a suitable destination for multinationals which it is.
We have many multinationals operating here already and have a lot to offer in terms of infrastructure, lifestyle, greater availability of housing and natural amenities.
Rosslare Port could do with a makeover and further development, and provision of high speed broadband, which like Christmas is always coming, could be speeded up. Getting the establishment of the Technological University of the South East would also be a positive step in attracting businesses to the area.
Tourism, which is crucial to many Wexford businesses will, to some extent be affected by perceived value for money and therefore the value of sterling against the euro. Although of course we are by no means totally dependent on tourists from the UK, and Wexford is doing a good job of promoting itself as a holiday destination,(eg. Visit Wexford, Irelands’Ancient East), numbers coming through Rosslare could fall for day trips, casual visits, group events etc. with direct and indirect consequences for local businesses.
These are just some of the possible issues which could be affected by Brexit. Ireland and Wexford need to start contingency planning to minimise possible damage to our economy. We need a stable government to broker new arrangements with the UK and the EU in relation to trade and free movement of people in the event of Brexit becoming a reality.
Tourist, agriculture and food producing organisations should be looking at ways to counteract the effects Brexit might have in their areas and plan for a post Brexit eventuality.
Government agencies and departments need to be more proactive in widening the country’s export base and developing new markets.
In a first move Irish ministers are to travel to the UK to inform people, particularly Irish communities of the serious risks of Brexit to both Ireland and the UK and British-Irish relationships. Acting Foreign Affairs Minister Charlie Flanagan has already held meetings with business groups and British – Irish organisations in London and will now be joined by other ministers in Liverpool, Manchester and the north-east to promote a stay in vote.
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