Posted on Friday 26 October 2018 by Ulster Business

John web

Following the publication of a ‘disastrous’ planning document from the Government on a ‘no deal’ Brexit, John Simpson examines the reality of life outside the EU in the worst case scenario

Leaving the EU was never going to be easy. More than 40 years of inherited rules, practices and complex multi-national agreements cannot be wiped out with a simple stroke of the pen. Quietly and stealthily, the UK and Irish economies and social policies have been effectively integrated. A critical test of leaving is the degree to which that integration is disrupted.

If the EU and UK authorities cannot agree on the terms of the UK’s withdrawal, it will be the failure of a prolonged series of negotiations essentially because the UK wants to ensure selected areas of continued co-operation while the EU is avoiding letting the UK have a self-interested ‘cherry picking’ agenda.

If the negotiations fail and there is ‘no deal’, the strict logic would be that the UK would be ‘on its own’ from March 30, 2019. A complete failure would be against the interests of both parties and that includes specific areas such as Northern Ireland or the Republic of Ireland.  

A ‘no deal’ outcome may take different forms. These may range, first, from a serious stand-off with minimal essential working arrangements, for example, to keep airline services operating, the electricity grid functioning and security arrangements to, second (and slightly less disruptive), pragmatic arrangements of continuing mutual recognition of standards and a passive agreement to maintain the inherited patterns of regulatory alignment.

With ill-will, airline services might be hit and electricity links made difficult. That degree of disruption would be politically unacceptable. However, challenges to regulatory alignment, or equivalence in comparative standards, are a less remote possibility. Even the apparently simple process of customs clearance and tariff collection might be affected to the point where essential supplies of goods were seriously delayed.

On this island, a ‘no deal’ outcome contains the possibility that an Irish customs and excise border would be expected. Without a withdrawal agreement there will (as a minimum) be uncertainty about cross-border trade which could affect the dairy sector and beef and pork trading as well as changes to supply chains for some industries.

A number of business sectors in Northern Ireland operate within the constraints of EU agreements, whether in banking, financial services, information technology and manufacturing. There is some doubt about possible challenges to the continuation of friction free trading from Northern Ireland.

‘No deal’ would mean the inconvenience and extra costs of doing business, providing services and changing aspects of lifestyles that should be avoidable. The odds are that the UK Government (if the hardline Brexiteers in Parliament are contained) is prepared for a workable compromise. An acceptable answer to the Irish border question is in the offing.

A ‘no deal’ when the UK leaves the EU is an extremely unwelcome prospect. Chances are that a deal will be struck. For Northern Ireland, even if there is a deal, there is a range of critical related questions waiting for clear solutions.  

Even an agreed deal will not necessarily be the best possible deal. ■


Follow us

Subscribe to Ulster Business Magazine

View Our Digital Library

A L Top 100 2019 button