It’s bad news for business, say Irish exporters

BRITAIN’S exit from the EU is bad news for Irish businesses, the head of the country’s largest exporters group has warned.

Simon McKeever, chief executive of the Irish Exporters’ Association, was stark about the consequences the vote would have on trade with Britain.

He said: ‘My feeling is it’s bad news for the UK, it’s bad news for Ireland and it’s bad news for Europe.

‘The immediate impact for us is the currency and the drop in it.

‘I see it going weaker when you have a ratings agency saying they intend to downgrade UK sovereign debt from Triple A.’

Total trade across the Irish Sea is worth around €2.5billion a month, making total trade between the two countries worth €30billion over the whole year. The UK is Ireland’s biggest trading partner.

And the collapse in the value of sterling – which plummeted from €1.30 before the result of the poll to €1.23 yesterday as the verdict became clear – means Irish exports will become far more expensive for the British to buy but also means that UK goods will be far cheaper to import.

Enterprise Ireland chief Julie Sinnamon said the main worry for exporters was exchange-rate volatility but said Ireland could ride out the storm.

She said: ‘Ireland is a strong, open and competitive economy and while the result will pose challenges for Irish exporters we will move forward and implement plans to help our client companies deal with the impacts.

‘In addition to our team in the UK, we have put in place a dedicated email address, phoneline and team for Enterprise Ireland clients to respond to their immediate concerns and issues,’ she said.

Farming groups were last night coming to terms with the bad news, which came on top of a prolonged period of depressed prices in both the dairy and beef sectors.

Disappointed IFA president Joe Healy called on the Government to take ‘immediate, decisive steps’ over concerns about the implications of the vote.

He said: ‘The outcome of the UK vote has major implications for Irish agriculture and the agri-food sector. The Government must give a clear signal that the issues of major importance to this sector, our trading relationship with the UK and Northern Ireland and the EU budget, will be central to the EU-UK negotiations.

‘Minimising uncertainty and setting out a clear strategy on the next steps is a priority.’

He said the IFA’s top two issues were the minimisation of any barriers to trade – no tariffs, continuation of free movement or as free as possible of agricultural produce between Ireland and the UK, particularly between with the North.

Agriculture Minister Michael Creed said: ‘The resilience of the Irish agrifood sector is well-recognised and this together with the strong commercial relationships built up over years of trading will help us to negotiate our way though the challenges ahead.’

‘Ireland is strong and competitive’

But the most immediate concern for Irish business will be the fluctuation of sterling and its effect on Irish exporters’ cost competitiveness.

Irish Exporters’ Association chief

‘Disproportionately affected’

Mr McKeever added: ‘My advice to exporters dealing in trade with the UK is talk to your local banks or financial service providers about viable opportunities to hedge your currency risk.’

‘The main areas in which potential impacts are foreseen are in relation currency fluctuations, tariffs and trade, the EU budget, regulations and standards, and customs controls and certification.

‘The UK exit vote also raises complex issues for the fisheries sector. Of course, the most immediate concerns for agri-food exporters centre on exchange rates.’

Bord Bia chief Aidan Cotter said he was hopeful that our robust food sector would be resilient in face of major upheaval. He said: ‘The resilience of the Irish food sector, the long-standing and strong trading relationship between Ireland and the UK, and the close ties between both countries will help the Irish food industry to navigate through these uncertain times.’

But others were not as optimistic about the future.

The Institute of International and European Affairs’s director general Tom Arnold said: ‘Ireland is the EU country most exposed to the risks of Brexit and will be disproportionately affected by the UK vote.

‘Ireland is the only member state to share a land border with the UK and it remains the most deeply integrated in terms of trade, supply chains, migration, language and culture.

‘The shock will be both economic and political.’