Andy jalil –
Britain’s plans to broker new international trade agreements when it leaves the European Union will be “extraordinarily difficult”, according to Ireland’s President Michael Higgins.
The President, who was attending a series of business and economic meetings during his recent tour of Australia said the suggestion the UK could devise its own trade deals post-Brexit would be testing.
He said: “Most people I have spoken to regard this as extraordinarily difficult.” His comments came after the fifth round of Brexit talks ended in Brussels between David Davies leading the UK’s Brexit negotiation with his EU counterpart, Michel Barnier.
But after Prime Minister Theresa May’s meeting in Brussels last week, it is hoped that trade talks, which Britain is so keen to start, may begin after December.
Ireland remains most affected by Brexit with the bulk of its trade being with the UK.
Higgins said that while Brexit was “of course a challenge” for Irish business, we believed that for many countries the possibilities of trade with Ireland “had opened up” since June last year, when Britain voted to leave the EU.
Speaking about the impact Brexit had on international trade in relation to Ireland, Higgins said: “If you look at the conversation I had with the Premier of Victoria (in Australia), for example, the possibilities of opening trade with Ireland or with the European Union are higher on everyone’s agenda.” Enterprise Ireland chief executive Julie Sinnamon, also stressed the importance for companies to devise a “Brexit-proof strategy.”
She said: “It’s about making sure we continue to reduce our dependence on the UK. We have to set a target to increase exports outside the UK by 50pc by 2020.” Higgins spoke about the importance of developing economic literacy to ensure Ireland avoided repeating economic mistakes of the past.“You are best served when you know the assumptions behind a model,” he said.
He also said that, within the EU, cohesion between member states had declined, creating a problem of connection and legitimacy.
“We have allowed ourselves to become divided by a common, one-size-fits-all macro-economic policy framework which pits creditor against debtor, and those with trade surpluses against those without,” he said.
Ireland is set for its banking sector to grow as Brexit exodus enquiries ramp up.
Britain’s departure from the EU is likely to lead to a rebalancing of the profile of the Irish banking sector, with an increase in operations and its overall size, the Central Bank said.
An internal report from bank’s Brexit Task Force, published by the regulator, noted that engagement with firms potentially looking to shift or set up operations in Ireland had levelled off ahead of the summer months.
But it said the intensity of the interaction with international firms that had already expressed interest in moving to Ireland had substantially ramped up.
There has also been a rise in the number of banks looking to engage on the potential establishment of investment firms in Ireland, the documents stated.
“Based on engagements to date and depending on actual applications received, it is likely that there will be a rebalancing of the profile of the Irish banking sector, with a more even split between the total size of banking assets broken down by international wholesale banking activities versus domestic retail focused banking activities,” the bank noted.
The Brexit Task Force is made up of representatives from divisions across the bank, and reports to the Central Bank Commission on a quarterly basis.
The bank’s chief economist, Gabriel Fagan, said that the probability of a very severe Brexit can’t be ruled out.
He said there could be knock-on effects that haven’t been thought of.“What will the legal basis be of contracts in a post-Brexit EU for international contracts?” he asked.
“There are some people who are saying maybe Irish law will become the basis, just like Delaware law is the basis for a lot of US financial law.
If it were to become the case, then it would have some very big implications for the legal system in Ireland.
The legal profession in Ireland would become somewhat more prosperous.
There are many such issues, things that you haven’t thought about, about the implications,” Fagan added.
Meanwhile the Central Bank has fractionally upgraded its growth forecast for this year and next, to a 4.9 per cent and 3.9 per cent respectively.
(The author is our foreign correspondent based in the UK. He can be reached at email@example.com)