ISME gives a cautious welcome to the proposed Brexit deal.

  • Proposed deal is a notably harder Brexit, as UK will leave EU customs union.
  • The draft agreement struck between London and Brussels is the easy part of the W-T-F Brexit process.
  • Real work on what the future and final tarriff arrangement between the UK and EU starts once this deal is over the line.
  • It’s likely now that a ‘no-deal’ Brexit is dead in the water.

As we enter a crucial 48-hour period for the proposed Brexit deal, ISME gives it a cautious welcome, but notes that it comes at a considerable cost.

The deal strikes a notably harder Brexit than that proposed by Theresa May, in that the UK will leave the EU customs union.

Where before there was a ‘backstop’ with no time limit, the new deal allows Northern Ireland to ultimately ‘opt out’ of its hybrid status in the new arrangement; although this ‘opt out’ is subject to a simple majority in Stormont, apparently with no exercise of a minority ‘petition of concern.’

Ironically, the draft agreement struck between London and Brussels is ostensibly the easy part of the W-T-F (Withdrawal agreement, Transition phase, Future arrangements) Brexit process.

It is simply the withdrawal phase. The future arrangements will be far harder to negotiate, since the UK will be looking over its shoulder to trade deals with the US, China, India, Mercosur, and others.

And whether those negotiations can be concluded in 14 months is a moot point.

The Transition phase represents a stand-still period until the end of 2020, during which the real work will be done on what the future (and final) tariff arrangements between the UK and EU.

Obviously, everyone hopes that the tariffs to be agreed between the UK and EU are better than the non-preferential tariff rates and quotas on imports if the UK leaves the EU with no deal.

The UK updated these proposed tariffs for a no-deal scenario on 8th October, and they would have severe consequences for Ireland, particularly for food exports and imports.

Ireland also enjoys a surplus in sales of services to the UK of more than €6bn per annum. It remains to be seen if, or how, these will be affected under the proposed deal.

However, the passage of this deal through Westminster on 19th October is far from guaranteed.

On the positive side, it is likely that the proposed Brexit deal represents a ‘basement-level’ below which the UK is unlikely to go. It also means that a ‘no-deal’ Brexit is almost certainly dead in the water.

David Davin Power will chair a main-stage discussion on Brexit at the ISME Annual Conference Citywest on 23rd October, with Shanker Singham, Alternative Arrangements Commission; Professor Dolores Cahill, Chairwoman of Irexit Freedom Party; Fergus O’Dowd TD; Lisa Chambers TD; and Dr Karen Devine, Department of Law and Government DCU (home of the Brexit Institute).

ENDS
Notes:

  • ISME should be referred to as the Irish SME Association

For further information, please contact ISME offices T: 01 6622755 E: marketing@isme.ie