Wednesday 20 September 2017

Companies face new Border challenge

It is estimated that 30,000 people make the cross-border commute to work every day. These lorries, vans, cars and people are involved in a trade in goods and services that now totals close to €6bn a year, growing at an average annual rate of 4pc over the past 20 years. Stock picture
It is estimated that 30,000 people make the cross-border commute to work every day. These lorries, vans, cars and people are involved in a trade in goods and services that now totals close to €6bn a year, growing at an average annual rate of 4pc over the past 20 years. Stock picture

Thomas Hunter McGowan

In the space of one month 177,000 lorries, 205,000 vans and over 1.8m cars will cross the Border between the Republic of Ireland and the North.

It is estimated that 30,000 people make the cross-border commute to work every day. These lorries, vans, cars and people are involved in a trade in goods and services that now totals close to €6bn a year, growing at an average annual rate of 4pc over the past 20 years.

This trade is disproportionately important for small business. The reality of this 'frictionless' land border for many small businesses is that the all-island market is effectively their local market despite it being cross-border, a notion that is unfamiliar to many small businesses in Britain.

Ensuring that businesses continue to avail of these growth opportunities, which also extend to value-enhancing research, development and innovation partnerships, is a key challenge for InterTradeIreland, the cross-border trade and business development body set up by the Belfast/Good Friday Agreement.

Through our quarterly All-Island Business Monitor, InterTradeIreland has been monitoring the response from the business community across the island to the UK's decision to leave the EU.

One of the most alarming pieces of information from this survey is that 98pc continue to say they have no post-Brexit plans in place.

The lack of planning is driven by two key issues, first an understandable focus on 'the now'. In an intensely-competitive market where firms are facing the challenges of rising costs as well as difficulties recruiting appropriate skills, finding the time and resources to plan for even significant structural changes is a perennial problem.

The second issue is the degree of uncertainty due to a perceived deficit in reliable information, that complicates the scenario-building process.

Over the past six months, InterTradeIreland has been speaking at events on both sides of the Border, encouraging businesses to prepare for a new cross-border trading relationship while listening to their concerns. This engagement, backed up with information from our Business Monitor and several in-depth case studies has helped us develop and launch a new Brexit Advisory Service for potential and current cross-border traders.

The service aims to address this by offering businesses a number of supports to guide them through any Brexit challenges they may be facing. They will be able to access a number of supports from the service including Brexit Readiness Vouchers - a €1,000 voucher to fund bespoke advice from professional Brexit experts. The service will also include direct access to specialist technical advice in areas such as tariff and non-tariff barriers, rules of origin, certification, staffing, exchange management and logistics. The service is built on the mantra of encouraging businesses to plan, act and engage.

Planning can begin with basic questions around the freedom of movement of goods, services, people and how that impacts a business. What might the impact be of tariffs or non-tariff barriers? What is the potential tariff that could be levied on my products? Do I know what rules of origin certificates are and what they cost?

When the business answers these questions, and InterTradeIreland's new service can help with this, the next step is to act, or at least to prepare alternative scenarios depending on what emerges from the negotiations. Innovation, the application of Lean techniques, and diversification are just some options to build higher margins within a business model.

Critically we are encouraging business owners to engage widely throughout the Brexit process. Talk with industry representative bodies, with industrial support agencies like InterTradeIreland, lenders, your workforce, customers and suppliers. Policymakers are also intensely interested in direct feedback from the business community to inform negotiating stances.

InterTradeIreland's message is simple: while we recognise the pressures facing small business owners dealing with the here and now, there is, nevertheless, a window of opportunity that must be grasped to prepare for the challenges and opportunities that will be presented by a new cross-border trading relationship.

Thomas Hunter McGowan is chief executive of InterTradeIreland

Sunday Indo Business

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