Friday 21 October 2016

Beyond the rhetoric, Ireland and Germany are in the same boat and need to trade with UK

Ralf Lissek

Published 23/07/2016 | 02:30

German Chancellor Angela Merkel (R) and Irish Prime Minister Enda Kenny get ready to address a joint news conference at the chancellery in Berlin. JOHN MACDOUGALL/AFP/Getty Images
German Chancellor Angela Merkel (R) and Irish Prime Minister Enda Kenny get ready to address a joint news conference at the chancellery in Berlin. JOHN MACDOUGALL/AFP/Getty Images

Francois Holland says that France "understands" Ireland's special concerns over Brexit. So too does Germany.

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Ten days ago, following talks with the Taoiseach Enda Kenny in Berlin, Chancellor Merkel said that Dublin's voice will be "heard as much as anyone else's" in the forthcoming talks between the EU and the UK.

No country has ever invoked Article 50 of the Treaty on European Union. The timeframe regarding exactly when and how Britain will leave the UK is still being played out. Put simply, this is an evolving situation.

Until the smoke clears, and as leaders across the continent endeavour to find a coherent and a structured approach to addressing Brexit, it would perhaps be wise not to over-analyse every political utterance.

Complex negotiations always involve large elements of megaphone diplomacy and private discussions, but in the end a solution will be founded on hard-nosed economic realities.

Germany is a trading nation, and so too is Ireland. Exports are crucial to both, and both Ireland and Germany enjoy strong trading bonds with the UK.

Combined export and imports between Ireland and the UK are worth around €30bn per annum. That is almost the same amount - €28bn to be precise - that Germany exports in cars and car parts alone to the UK.

Neither Ireland nor Germany can afford to lose out on trade of this magnitude. And beyond all the rhetoric, Ireland and Germany are both in the same boat. It is in our mutual interest that we have an accommodating relationship with Britain in which trade and commerce can continue to flourish.

We would also do well to remember that, irrespective of Brexit, Britain needs to trade with Europe. The UK currently has a negative trade balance and it simply cannot afford to cut itself off economically from the rest of the continent.

Right now, both Ireland and Germany need to be cognisant of the fact that a deal surrounding Britain's exit of the EU has to be agreed by all 27 of the remaining EU states.

Some of these countries, for example in Eastern Europe, do not have the same intertwined relationship with the UK as Ireland does. They are less likely to be motivated by the desire to strike a favourable deal. These competing pressures need to be managed and respected.

Arguments about 'special cases' need to be sensitively made and conducted in a manner that will resolve political tensions - not inflame them. But Ireland also has to make its case. Public opinion across the EU needs to be informed about the potentially negative consequences of Brexit for Ireland.

During the economic crisis, Ireland recognised it was important to explain to Europe the positive steps the country was taking to bring about economic recovery and to highlight that the Irish approach was very different to some other countries in crisis, such as Greece.

Irish diplomats, economists, politicians and journalists did a terrific job. A similar national PR offensive is now required.

As we look to the future, I am confident that Ireland and Germany will work closely together at a political level. Both our countries want to ensure that Brexit does not disturb the international trade environment crucial to our open economies.

At the same, we should recognise that Brexit will mean a steady increase in Ireland's export and import relationship with Germany, as Irish businesses look for a strong alternative no-tariff trading partner.

The German-Irish Chamber of Commerce and Enterprise Ireland have already commenced discussions to further intensify trade relations between our two nations.

Ralf Lissek is CEO of the German-Irish Chamber of Industry and Commerce

Irish Independent

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