Brexit is the greatest economic challenge faced by Ireland in the past 50 years, Anne Lanigan, the head of the Brexit unit in Enterprise Ireland told a seminar co-hosted by Irish Ambassador Patricia O'Brien and Richard Dujardin, the president of the Franco-Irish business group NetworkIrlande, at the Irish Embassy in Paris.
"It is obvious that Ireland is far and away more likely to be affected than anybody else," said Rory Montgomery, the diplomat responsible for EU-UK negotiations in the Department of Foreign Affairs.
Ireland's exposure to the British market is enormous. A government pamphlet handed out to guests notes that 80 per cent of goods produced by individual firms in the agri-food sector are exported to the UK, either for direct use or for onward transit. The busiest international flight route in Europe is between London and Dublin. Nearly half of flights coming into Ireland originate in the UK.
“At the moment, our clients export €21 billion around the world. Of that, €7.55 billion or 35 per cent goes to the UK,” said Ms Lanigan. By comparison, Ireland currently exports only €4 billion to the euro zone.
The Irish food and drink sector is similarly exposed to the British market. "We currently export €11 billion to 108 countries around the world," said Shane Hamill, the Brexit specialist at Bord Bia.
“In terms of market breakdown, 37 per cent of total food and drink exports go to the UK, 32 per cent to the rest of the EU and 31 per cent to international markets.”
Food exports
Ireland saw a €500 million drop in food exports to the UK in late 2016, because of the depreciation of sterling. “Our companies tell us that once the currency goes beyond 85 pence, they’re struggling,” Ms Lanigan said.
In recent months, Bord Bia held currency workshops and issued €250,000 in grants to companies dependent on the UK market. It has held 27 trade fairs around the world, and established a “risk diagnostic tool” to attempt to measure the risks associated with Brexit.
Ms Lanigan admitted that “challenges are greater than opportunities.” But Brexit forces Irish companies to diversify, innovate and “create resilience that even if Brexit were cancelled would be good things for them.”
Ms Lanigan compared the dilemma faced by Ireland to Australia’s experience when the UK joined the European Community in 1973.
"They told me they felt betrayed," she said. "Suddenly there were tariffs on their products going to the UK. They took the challenge, turned around their industries, looked to new markets virtually on their doorstep in Asia. Now, Australia looks back and says, 'That was the best thing that ever happened to us.' My vision is that in 20 years time, we'll turn around and say, 'Brexit was the best thing that ever happened to us'."
Less sanguine
Mr Montgomery, a seasoned diplomat with extensive experience in Northern Ireland and the EU, was less sanguine.
“I’m not quite sure I would agree that we will look back and think it’s the best thing that ever happened to us,” he said.
“We have to make the best of it. There will be positives as well. We now realise as a country that we have to do more, more quickly, of what we should do anyway.”
