LONDON: Britain leaving the single market and customs union will threaten the viability of many Irish firms. This is especially true for those that export to the UK with products that offer a low profit margin. That is not to be alarmist, but to be factual. The negotiators of the Brexit divorce deal need to be clear on its impact and it is the Government’s job to highlight the potential impact of this to the negotiators.
Trade won’t cease, but it will become much more complicated. The USA is outside the customs union and significant trade still occurs between Europe and America. Nonetheless, Britain’s decision will have a big impact on Irish businesses both sides of the Border. Businesses will have to lodge customs declarations for exports and imports, again albeit not in the traditional paper-based format, but it will be both timely and cost approximately €100 per economic movement. It will inevitably mean some form of Border controls, albeit not necessarily at the frontiers. Electronic tagging and declaring your goods at designated warehouses could become the norm.
The impact of this means additional costs in terms of customs compliance, clearance costs, upskilling or employment of additional staff and potential for additional indirect costs due to the risk of border delays. Finally, it may also mean additional customs duties, non-tariff barriers, licensing and other cross-border taxes. It means some companies trading today will struggle under this regime. That is what both sides in these negotiations need to understand.
