Brexit to intensify competition for investment
Following a meeting with EU chief Brexit negotiator Michel Barnier in Dublin, Ibec CEO Danny McCoy welcomed the awareness of Ireland’s unique Brexit exposure and said Irish concerns now need to be directly and explicitly addressed in negotiations and in the terms of a future EU-UK trade deal.
“Brexit is not only likely to disrupt trade flows, but will intensify competition with the UK for inward investment,” warned Mr McCoy. “Ireland and the EU need to prepare for this and stay competitive. Europe will need to revisit its fiscal rules, in order to support investment by Members States, and ensure that countries have the flexibility to compete with the UK post-Brexit, including on tax.”
Mr McCoy continued: “We need to keep a close eye on how Brexit will affect the evolution of the EU into the future, and the UK’s economic model. Both will have a big impact on the external business environment. It is vital that the Brexit outcome does not disadvantage Ireland’s economic prospects in any way, and in particular, it must not damage the competitiveness of Ireland and the EU in the global race for investment.
“The risk of no deal or a bad Brexit deal are very real. Comprehensive contingency planning is needed at both a domestic and EU level, including a temporary EU state aid framework to offset the worst effects of Brexit on otherwise viable firms.
“Tailored Irish provisions will need to cover the free movement of people, but also the massive trade exposure of key sectors and the potential impact on highly integrated cross-border supply chains. Comprehensive transitional arrangements are also vital. To make progress, goodwill is needed on both sides. We need to focus on mutually beneficial outcomes, which maintain existing strong EU-UK business ties. An ambitious, comprehensive free trade deal is the aim, but fair competition must also underpin any new relationship.”
Ibec is advising all member companies to examine how Brexit might impact their business and is providing contingency planning support. The Ibec guide to managing Brexit is available at www.ibec.ie/brexit. It sets out potential implications for companies, and includes a toolkit to help companies assess the risks and prepare a response.