Business Irish

Monday 24 July 2017

Brexit could cripple Irish trade with UK - Ibec report

British Prime Minister David Cameron Photo: REUTERS/Neil Hall/Files
British Prime Minister David Cameron Photo: REUTERS/Neil Hall/Files
Peter Flanagan

Peter Flanagan

If Britain leaves the EU it will force the value of sterling down sharply and have a crippling effect on Irish firms trading there, a new report has claimed.

New figures from business lobby group Ibec claim that sterling may end up losing as much as 15pc of its value if the UK was to vote to leave the EU. That devaluation would make Irish products being traded into Britain much more uncompetitive on price and could end up cutting Irish trade with Ireland by as much as a fifth.

Ibec director of EU and international affairs Pat Ivory said his group's members are "deeply concerned" at a possible Brexit.

"The size and economic scale of the UK means the stakes are very high, not just for the UK but for Ireland and the rest of Europe

"A UK departure would be a blow to the Irish recovery and result in a protracted period of uncertainty for business. It would undermine Europe's ability to act collectively and decisively in the world and could push the EU back into a dangerous period of crisis management.

"The UK and Ireland have been close allies in Europe across a wide range of areas. An EU without the UK would be a lesser union," he added.

Different parts of the economy would be affected by a Brexit but the food and agriculture sector would be dealt a huge blow. Ibec says the UK accounts for 55pc of meat exports and 30pc of dairy exports from Ireland.

Ibec has been one of the few business groups in this country to be vocal on the dangers of a possible Brexit.

The group's chief executive Danny McCoy has warned Ireland could be forced to follow the UK out if a Brexit happened.

Ibec's report tallies with research from the ESRI, which last year said a Brexit would cut Irish-UK trade by a fifth. Given Ireland's size, it would be very difficult to replace that lost trade by doing business with other countries, the ESRI warned.

The Ibec report comes a day after British-Irish Chamber of Commerce boss John McGrane warned that for all its flaws, his members believe that Britain staying in the EU would be the preferred outcome of the referendum on June 23.

"Our members have diverse views on this. But the consensus is that Britain should stay - in a reformed, stronger EU," Mr McGrane told the 'Sunday Independent'.

"Many of our members feel the EU needs a lot of work. A lot of that has to do with the single market and the fact that there are lots of goods and services that can't trade freely at all," he said.

British prime minister David Cameron has been criticised for opening the Pandora's Box of a referendum, but Mr McGrane said that some good could still come from the referendum.

"We are poised at an opportunity to bring about the European Union we always wanted," he said.

Irish Independent

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