The head of the Irish employers' group Ibec has predicted that the UK will not be able to strike a trade deal with the EU in light of the priorities laid out this week by British prime minister Theresa May in her Brexit speech.
This opens up the prospect of the UK switching to World Trade Organisation tariffs, which would result in significant costs being incurred by Irish exporters. Speaking to the Irish Times Inside Business podcast on Wednesday, Ibec chief executive Danny McCoy said: "She talks very eloquently but she's saying something very harsh, and that's the way we need to interpret this. I think she knows it's a 'no' deal. They're out and they're going to be aggressively looking for that trade deal and we can expect aggressiveness coming on the corporate tax rate as well.
"She's offered up a fairly appalling vista for the business community here in Ireland to start a deal with. It is going to be much more significant than many people are giving credit to."
Extreme position
Leading Irish economist Jim Power said Ms May had clearly decided to take an "extreme" position on the trade negotiations, which will begin when the UK triggers article 50 of the Lisbon treaty in March.
“One of the telling things she said was that for Britain, no deal is better than a bad deal,” he said.
Mr Power said that if the UK moved to applying WTO tariffs, some €800 million could be knocked off the value of Irish agri food exports.
“If you extrapolate that across the whole economy, a WTO-type hard break for Britain could knock at least up to 1 per cent per year off Irish GDP,” he said, adding that about 40 per cent of indigenous Irish industry exports go to the UK.
Mr Power also called for the appointment of a Minister for Brexit in Ireland.
“I get the sense that in Government, no one is in charge,” he said. “This is one of the most fundamental structural changes this country has experienced since 1973 arguably.
“I get the impression that there is a turf war going on between the Department of the Taoiseach and the Department of Foreign Affairs about who really should be out there batting for Ireland. That sort of turf war would be disastrous for Ireland. That’s why we need to put a minister in charge of Brexit for Ireland. What I hear from Government does not fill me with confidence.”
On Tuesday, Ms May said the UK would not be seeking membership of the Single Market and ruled out full membership of the customs union.
"I want Britain to be able to negotiate its own trade agreements," she said. "But I also want tariff-free trade with Europe and cross-border trade there to be as frictionless as possible."
