The Republic should be allowed keep the full tariff on imports from the UK in the event of a no-deal Brexit, an industry body for accountants has said.
The Association of Chartered Certified Accountants (ACCA) says Irish customs officials could be collecting as much as €3.4 billion in tariffs from British companies exporting to Ireland if Britain crashes out of the EU on march 29th.
Under current rules, Brussels takes 80 per cent of all the World Trade Organisation (WTO) tariffs on imports coming into the bloc. The remaining 20 per cent is kept by "the country of entry".
However, Acca is calling on the EU to waive its right to this money and to allow the revenue be used as part of a wider Brexit support package in the Republic.
WTO tariffs, if implemented under a no-deal scenario, are expected to raise the costs of many UK goods and services in the Republic by between 5 per cent and 30 per cent, with consumers expected to shoulder the additional cost. This could reduce national income and employment by as much as 1 per cent .
At the same time, many Irish businesses will be priced out of the UK market due to the inflated cost of Irish exports there, Acca said.
The body said that retained revenue could be targeted at supporting Irish consumers, businesses and farmers, who are most impacted by a no-deal Brexit.
In 2017, Irish imports from the UK cost £34 billion (€38 billion) and Acca has estimated that under the existing WTO trade system, import duty could add as much as €3.4 billion to this bill meaning. The EU would take the vast majority (€3 billion) of this for its central budget.
Car imports alone, it said, would equate to the EU taking €80 million out of the Irish economy, with increased costs of 10 per cent being borne by Irish consumers.
“Many people will be surprised that, under international WTO rules, imports into the EU from any other international region sees only 20 per cent being retained by the country of entry,” Acca Ireland chairman Stephen O’Flaherty said.
“ While Ireland was a net benefactor of EU investment during the financial crisis over 10 years ago, with Brexit it now finds itself in the eye of an international storm and the EU must maintain its flexible support,” he said.
“ It can do this by ensuring that the revenue from UK WTO trade tariffs form an integral part of a far reaching economic support package that can help offset some of the financial upheaval of Brexit on businesses, communities and families throughout Ireland,” he said.
“In particular, this additional revenue could be redirected to support investment in sectors such as the agri-food industry which sees Ireland’s largest trading partnership (38 per cent) with the UK, exporting €5.2 billion of goods in 2017,” he said.
