The worst-case scenario of the UK crashing out of the EU has receded, but it would not be correct to label the process that’s now in motion a ‘soft’ Brexit in any form.
Everything now points to a significantly harder Brexit – when it happens – than had been on offer under Theresa May’s Withdrawal Agreement, which promised regulatory alignment between this country and what remains a key partner for trade.
The good news is a deal has been struck. However, details of the UK’s relationship with the EU regarding trade still need to be worked out, assuming Mr Johnson can swing Parliament behind his deal.
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There will be a transition period but after that the Irish and UK economies will be on divergent paths – with real costs for both sides in terms of lost trade and added costs.
A transition period buys time for industries like beef, though finding new markets for traditional products will be brutally hard. It also means Finance Minister Paschal Donohoe will not have to deploy his Brexit rescue package, or borrow to pay for it next year. In fact, the State should be in a position to run another small budget surplus next year. But the closeness of our current relationship with the UK is ending. In the words of Boris Johnson, the UK “will leave the EU’s customs union … and be able to strike trade deals all around the world”.
If the UK does move to a free-trade agreement type deal with the EU, that will still hit the agriculture and food industries hard, as they will be exposed to far more competition and higher tariffs in Britain.
That point was rammed home at a PwC conference on Brexit by Thomas Conefrey, a senior economist at the Central Bank, who said: “A free-trade agreement with the EU is a very hard version of Brexit.”
His boss, Central Bank Governor Gabriel Makhlouf, said this week: “There are no scenarios for Brexit that are good for Ireland.”
Beyond that, for all the noise, sweat and fury, we really don’t know all that much. “The wild thing is that in five years’ time, even if the UK leaves under this deal, we still don’t know if the UK-EU relationship will look like Canada, Norway or somewhere in between,” said Sam Lowe, who is trade and Brexit senior research fellow at the independent Centre for European Reform.
“If this passes, then the UK enters a transitional period with no change to its economic arrangements, but officially exits the EU. Transition lasts until December 2020, but can be extended by one or two years,” said Constantine Fraser, political analyst at economic consultancy TS Lombard.
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Home » Analysis & Comment » David Chance: 'If deal passes, we'll face a much harder Brexit than May's version'
David Chance: 'If deal passes, we'll face a much harder Brexit than May's version'
The worst-case scenario of the UK crashing out of the EU has receded, but it would not be correct to label the process that’s now in motion a ‘soft’ Brexit in any form.
Everything now points to a significantly harder Brexit – when it happens – than had been on offer under Theresa May’s Withdrawal Agreement, which promised regulatory alignment between this country and what remains a key partner for trade.
The good news is a deal has been struck. However, details of the UK’s relationship with the EU regarding trade still need to be worked out, assuming Mr Johnson can swing Parliament behind his deal.
Please log in or register with Independent.ie for free access to this article.
Log In
New to Independent.ie? Create an account
There will be a transition period but after that the Irish and UK economies will be on divergent paths – with real costs for both sides in terms of lost trade and added costs.
A transition period buys time for industries like beef, though finding new markets for traditional products will be brutally hard. It also means Finance Minister Paschal Donohoe will not have to deploy his Brexit rescue package, or borrow to pay for it next year. In fact, the State should be in a position to run another small budget surplus next year. But the closeness of our current relationship with the UK is ending. In the words of Boris Johnson, the UK “will leave the EU’s customs union … and be able to strike trade deals all around the world”.
If the UK does move to a free-trade agreement type deal with the EU, that will still hit the agriculture and food industries hard, as they will be exposed to far more competition and higher tariffs in Britain.
That point was rammed home at a PwC conference on Brexit by Thomas Conefrey, a senior economist at the Central Bank, who said: “A free-trade agreement with the EU is a very hard version of Brexit.”
His boss, Central Bank Governor Gabriel Makhlouf, said this week: “There are no scenarios for Brexit that are good for Ireland.”
Beyond that, for all the noise, sweat and fury, we really don’t know all that much. “The wild thing is that in five years’ time, even if the UK leaves under this deal, we still don’t know if the UK-EU relationship will look like Canada, Norway or somewhere in between,” said Sam Lowe, who is trade and Brexit senior research fellow at the independent Centre for European Reform.
“If this passes, then the UK enters a transitional period with no change to its economic arrangements, but officially exits the EU. Transition lasts until December 2020, but can be extended by one or two years,” said Constantine Fraser, political analyst at economic consultancy TS Lombard.
Source: Read Full Article