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Barring belated surprises like a rebellion in Westminster or by an EU member state, a last-minute deal between Europe and the UK would avoid Ireland’s worst fears on January 1.
A no-deal would mean the entry into force of tariffs on many products and particularly high levies on agri-food products, affecting an industry that has traditionally focused on exports to Great Britain.
The cost would be as many as 100,000 jobs, according to a forecast by the Central Bank, a prospect that made the Irish government cheer for a deal with growing enthusiasm as time tightened.
But while the expected deal would prevent the worst, it seals a very different relationship with the UK than before, which will mean profound long-term changes in the Irish economy.
The terms reflect a “hard Brexit” interpretation of the 2016 referendum that was an extreme minority position during the campaign itself, only coming to dominate with the rise to power of Prime Minister Boris Johnson and his hardline allies.
Under an agreement, customs declarations will be required on trade between Britain and the European Union, a formality that adds costs to businesses and will mean that the ease of long-enjoyed trade between the islands is a thing of the past.
There will be many changes in the daily exchange between jurisdictions. UK professional qualifications will no longer be automatically recognized in the EU. UK citizens will require visas for stays longer than 90 days in any 180-day period for most of the continent and need proof of health insurance – terms familiar to non-EU visitors such as Australians. Every sector of the economy has new requirements that will cause friction where there was none before.
The end of fluid trade will mean that long-term economic orientation to or through Great Britain will make less sense for Ireland.
The disruption to the transport of goods passing through Britain after France blocked trucks and imposed negative testing requirements for Covid-19 on drivers this week due to fears of a new infectious strain showed Ireland’s vulnerability to problems in the UK land bridge.
The January 1 change is unlikely to be perfect, especially since things like the UK’s new IT system are largely untested and companies have little more than a week to adjust to the final details of how the UK will work. new system.
Supply chain
Short-term or medium-term disruptions aside, businesses should not expect trade across Britain to go back to what it was before. For the entire island of Ireland, the conditions that determined the old routes of the supply chain have changed, and they have changed permanently, tilting the balance towards direct links with the rest of the EU.
This accelerates a trend facilitated by Ireland’s accession to the EU’s predecessor, the European Economic Community in 1973, after which trade with Great Britain declined comparatively, while growing with the rest of the world.
That year, the UK bought 55 per cent of Irish goods exports. In 2019 it bought only 10 percent. It was replaced as a destination for Irish exports by the rest of the EU in the 1980s and by the United States in the 2000s.
Hastily agreed, the full implications of what the new trade terms with the UK and the Northern Ireland protocol will mean in practice will only become a reality in time.
But fundamentally, as a small island off Europe, we will no longer be an appendage to the UK market, but rather an appendage to the continental market. This will change our supply routes, which outlets are easy to order online, the products on our shelves, and ultimately perhaps the stores on our streets.
Economic, cultural and political changes go hand in hand. Brexit was not Ireland’s decision or preference, but the consequence is that it will guide us economically and politically towards the continent.
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