Resolving the North-South Border situation as part of Brexit negotiations is "distracting" from the reality that "west-east" is the most critical Irish trade border, according to customs expert John O'Loughlin.
Irrespective of whether there is a hard or soft Brexit deal, Irish agrifood and seafood companies should be planning ahead, Mr O’Loughlin, who is Price Waterhouse Coopers (PwC) customs and international trade partner, has warned.
The State should also be encouraging more direct shipping links to Europe, similar to the new Brittany Ferries route between Cork and Santander in Spain, he said.
Mr O’Loughlin, who is speaking on the issue at the national ocean wealth summit in Galway this week, said that “customs is a well trodden path”, but most Irish seafood companies selling into Europe were dealing between EU partners.
Issue
While the Northern Ireland issue was "important", it was not the most critical in terms of current trade, where there will be a "fundamental shift" for many small and medium enterprises (SMEs).
"We have four borders between Ireland and Europe by the British landbridge route – as in Dublin, Holyhead, Dover and Calais – and so a customs declaration, a risk of import VAT and the risk of delays are all issues which are going to have an impact on competitiveness," he said.
“If there is a hard Brexit, we will have duties, and if there is a soft Brexit we may not,” he said.
“There seems to be a nervousness to plan when there are no real answers,” he said.
“But developing new markets takes a long time and the reality is that Britain is so big that this market cannot be ignored,” he said.
“Take a west-coast based Irish seafood company, which may have to register with British revenue; may have to set up a deferred payment account to pay duties; may have to set up a British bank account, and may have to register for VAT if import VAT, which is reclaimable, is charged,” he said.
One key “mitigation strategy” is registration with Revenue as an authorised economic operator (AEO), he said.
Status
“This is like the priority queue at an airport, and a seafood company with perishable goods needs to ensure it has AEO status,” he said.
There is “no cost” to acquiring AEO status, but companies must demonstrate that they have the controls for customs formalities in place, he said.
“This does not mean Irish SMEs have to hire dozens more staff, but they will have to ensure they can embed knowledge in the business, by hiring a person with expertise to deal with the ‘new normal’, or by upskilling existing staff,” he said.
He said that he was aware that some 20 companies were working with Revenue on acquiring this status, but believes there should be more.
“It is very clear that the negotiations with Britain are not in a good place, so business needs to react a bit quicker,” he said.
“The sooner companies take action, the better, as Brexit is happening and it is just an issue of timing.”
Mr O’Loughlin is one of a panel of speakers at the fifth annual Our Ocean Wealth conference in Galway on June 28th and 29th.
