Fallout of Brexit tricky for Ireland

Fallout of Brexit tricky for Ireland

For Ireland, Britain's exit from the European Union is complicated by the division of the island into the Republic and Northern Ireland, the region retained by Britain when the Republic was freed from its colonial yoke in 1922. In spite of partition, the Republic and the North have close ties dictated by geography, blood, tradition, politics and economics. All Ireland opposes Brexit.

Ireland as a whole is desperately trying to fend off the fall-out from Brexit and to find me­ans to stall or avert divorce. Since British courts are reluctant to take on the job, anti-Brexit British tax lawyer Jolyon Mau­gham is launching a legal action in Dublin’s courts to seek a ruling from the European Court of Justice, the highest tribunal in the European Union, on the possibility of reversing the process of Britain’s departure.

If the court rules that procedures for withdrawal from the EU are reversible, Britain would be able to reject the outcome of Brexit negotiations. That is, if it is unacceptable to the country’s parliament and voters. The case could also clarify what rights Britons would lose as EU citizens when the withdrawal process is triggered and when these rights would be lost. Hundreds of long-term Briton resident in or employed in EU member states, including the Republic, have already applied for naturalisation. 

It is significant that this effort is being mounted in the Republic and that it is being financed by crowdfunding, an internet means of raising cash for causes. The campaign has raised £70,000 ($852,000), mostly in donations of £50 or less, demonstrating that the cause is popular in Ireland and elsewhere.

Although Britain is to set into motion procedures for withdrawal from the EU by the end of March, commencing two years of negotiations on Britain’s departure and post-Brexit relations with the bloc, a crisis in Northern Ireland could delay this process.

The resignation on January 9 of Martin McGuinness, deputy first minister, has plunged the region into chaos. His party says it will not replace him. This could trigger a snap election which could take two months to organise. The Northern Ireland Assembly – which cannot meet unless the crisis is resolved or elections are held - must be involved in discussions on Brexit.

Both the Republic and Britain joined the EU in 1973, and in 1999 political relations improved because of a power-sharing agreement between Protestants who insisted on remaining in the United Kingdom of Great Britain and Northern Ireland (UK), and Catholics who sought to unite with the Republic.

Unlike England and Wales, the other components of the UK — Northern Ireland and Scotland — voted in favour of remaining in the EU. In both Northern Ireland and Scotland, there are some who propose secession from the post-Brexit UK with the aim of joining the EU on their own.

Due to Brexit, British and Irish citizens fear the loss of full rights to live, work and vote in both countries while there is a concern that the two-way trade — valued at more than £1 ($1.22) billion a week and supporting 4,00,000 jobs in the Republic could be affected.

Consequently, once negotiations begin, the Republic plans to lobby for close relations between post-Brexit Britain and the EU. Ties, however, could depend on whether there is a “hard” or “soft” Brexit.

Export market
In a bid to fend off Brexit losses and foster trade, the British Irish Chamber of Commerce, has set up a “gateway” intended to connect firms in the two countries.

Unfortunately, the Republic has already begun to suffer from the negative fallout from the Brexit vote.

During the last six months of 2016, Irish food and drink exporters lost Euro 570 million ($604 million) following the drop in the value of the British pound vis-a-vis the Euro. The British export market for Irish produce is expected to sink further.

Dairy farmers across the border in Northern Ireland could close down after Brexit if trade barriers with the Republic are re-established. Exports of dairy products would disappear from the shelves of the Republic’s supermarkets while one-third of Northern Ireland’s milk production would cease to cross the border for processing into butter, cheese and baby milk in the Republic. Tariffs, customs checks and red tape would make it impossible for the North to export its raw milk to the Republic.

The Republic's Brexit losses in the agricultural sector could be compensated by the gains in the banking and business sectors. The UK, US and Asian banks and firms based in Britain are flocking to Ireland with the aim of basing themselves within the EU and retaining access to the European single market.

Many firms also seek to take advantage of Ireland's 12.5% corporate tax rate, which is low for the EU and an incentive to set up in the Republic. Both banks and companies also see it as a suitable replacement for post-Brexit Britain because English is spoken and is the language of these sectors.

Since, for the Republic and the North, Brexit poses serious political and economic risks, the Irish simply want Britain's divorce from the EU to go away.