Business Brexit

Sunday 22 July 2018

Government plans for 'doomsday scenario' in case of no-deal Brexit

UK Brexit secretary David Davis Photo: PA
UK Brexit secretary David Davis Photo: PA

Shona Murray

The Irish government is preparing contingency plans in case the UK crashes out of the EU without striking a Brexit deal.

Each department has been ordered to become 'Brexit-ready' as assessments are under way to figure out how best to reduce the impact of this "doomsday scenario", including hiring and retraining of staff.

A report from every department detailing requirements and the scale of resources needed is due at the end of the week. The ramifications of a 'no deal' scenario cannot be overstated as the impact would be felt in all aspects of business, politics, economy, travel and daily life in Ireland.

Initially, several customs borders and checkpoints would have to be erected on the island of Ireland because there would be no way of monitoring what's passing from Northern Ireland into the EU.

Trading with the UK would immediately fall under World Trade Organisation (WTO) rules, meaning officials from Ireland would be obliged to slap steep tariffs and examine regulatory standards on UK goods entering the EU through Ireland. The UK would similarly apply costly tariffs which would be disastrous for Irish exporters as Britain is Ireland's largest trading partner within the EU.

It would be particularly destructive for the Irish agriculture industry, as tariffs in the agri-food sector under WTO rules are as high as 44 to 60pc.

In addition, 40,000 Irish jobs would be directly hit, according to the ESRI, which also pointed out that every major sector would be affected.

In aviation, planes would not be able to land or take off in the UK because Britain would no longer be in the EU single market for aviation. This has to be negotiated as part of Britain's future relationship either within the single market or through a bilateral aviation transport agreement. Irish fishermen would lose access to UK jurisdiction waters, where they collect most of their haul.

There would also be huge delays in ports and channels. The deal thrashed out between the EU and UK before Christmas, which dealt with avoiding a hard border in Ireland, has somewhat reduced the likelihood of this happening.

However, the British government mantra is that "no deal is better than a bad deal".

Meanwhile, UK Brexit secretary David Davis indicated the British government is willing to accept Europe's conditions for a two-year transitional period after it leaves the EU in March 2019.

The EU's guidelines demand Britain becomes a "rule-taker" as opposed to a "rule-maker" for this period. During this time, it will no longer have a say in making EU rules and laws, but will have to accept and apply all of them including regulations and the jurisdiction of the European Court of Justice.

Irish Independent

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