Sunday 30 April 2017

Both sides of the Border need to co-operate on Brexit

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Stephen Kelly

The UK's decision to leave the EU and the election of US President Donald Trump heralded seismic shifts in global economic policy, so as we entered 2017 in the North we were hoping for a bit more stability locally with our new executive and a turn towards traditional politics with the arrival of an Official Opposition - 2017 hasn't started well!

Government doesn't create manufacturing success but it does create the conditions which allow manufacturers to grow, generating wealth and work. What happens in the White House, Westminster, Leinster House and Stormont does matter.

It's our analysis that our sector is best described as "brittle" as we continued to crawl out of the 2008 crash.

Northern Ireland is a manufacturing economy. Between direct and supported jobs, one-in-four families in the North depend on a manufacturing wage. Focusing on building a competitive, skilled, innovative and growing sector with a target of 20pc of local GDP will bring some certainty in an uncertain world.

It is a plan which also ensures we retain the best possible access to the EU market and skilled and semi-skilled labour - and, it's not simply about "no return to the borders of the past", it should be about no return of any border, in any form, across or between these islands. Borders bring costs and complexity both of which destroy businesses.

Frankly, we needn't worry about the imposition of tariffs when the cost and complexity of Country of Origin Certification, regulatory barriers, customs controls and other non-tariff restrictions are placed on such an integrated and engrained supply chain across and between these islands.

If the UK leaves without a customs agreement to replace the Customs Union, then we will have a very significant threat to the manufacturing economy.

As an observer, it appears that the Irish Government receives a lot of criticism at home. It's not for us to say whether that's justified or not, however, from our engagements on the UK's exit from the EU with the Department of Foreign Affairs, through the All-Island Civic Dialogue on Brexit Sectoral Groups and Plenary, it's clear that business is being listened to, a plan is developing and actions taken to insulate Ireland from the worst of Brexit and position the country to capitalise on what opportunities may materialise.

The latest Plenary session on February 17 was a good example. There was significant concern and grumbling, but as the day unfolded, there was an increasing sense of a single team approach of the Government, its agencies, the wider body politic and civic society collectively bidding to tackle this Brexit problem.

At one point we had the minister and the chief executives of all the state agencies responsible for economic development on the stage and pitching how they are working to seize any Brexit opportunities. The optics of having the bosses of IDA Ireland, Enterprise Ireland, InterTradeIreland, Science Foundation Ireland, Bord Bia and Tourism Ireland with the minister on stage and the Taoiseach and a raft of other ministers in the audience did not go unnoticed by those from the North.

Not only do we not have local government working for us, but when we did, there wasn't even agreement on whether Brexit is an opportunity or threat. Business in the North is concerned about lack of detail, insight or planning around Brexit.

They don't know who to speak to or where to find information that will help them make the decisions necessary to plan their way towards Brexit opportunities or to avoid disaster. Businesses work at a completely different pace to Government. They can't afford to delay. That was made clear by Craigavon pharma manufacturer Almac in their powerful evidence presented to the NI Affairs Committee in the House of Commons last week.

Immediately after the UK Referendum result, their customers were asking for their Brexit plan. Within two weeks, they took action and it has since been confirmed they are opening a new operation in Dundalk and have purchased a firm in the Republic to guarantee a presence inside the EU.

Almac's solution could be a model for other manufacturers. The Dundalk operation will, certainly while the UK negotiates its EU exit, secure jobs in Craigavon. Equally, if firms in Ireland want to guarantee access to their critical UK market post-Brexit, they may work up plans to invest in the North. After all, jobs in Derry are good for Donegal and vice-versa.

If the right deal were achieved, we could see the reindustrialization of Northern Ireland. Can the North and the Border counties be uniquely positioned as a bridge rather than a border to the Single Market? Or what about a Freeport or Free Trade Zone status?

What we do know is that when manufacturing grows, the whole economy grows with it and that's worth positively fighting for.

Just as politics creates the conditions for business to create work, so too can business create the conditions to make Brexit work. So hopefully we will see some rational, not just political, outcomes.

We can't afford not to.

Stephen Kelly is chief executive of Manufacturing Northern Ireland

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