Brexit: No deal could bring ‘conflict’ in Irish fishing waters says expert
Brexit trade talks have been extended once again, but the language used by both the UK and the EU has been very tentative when it comes to the possibility of a deal before December 31. European Commission President Ursula von der Leyen, said “I cannot tell you whether there will be a deal or not” but confirmed that the “next few days are going to be decisive”. She also conceded that reaching an agreement over fishing rights remains “very difficult”, as the two sides fight over access to British fishing waters.
Another major sticking point is how far the UK should be permitted to depart from EU rules.
If there’s no agreement, border checks and taxes will be introduced for goods travelling between the UK and the bloc.
These measures could cripple Ireland in particular, as it uses Britain as a land bridge to ensure products can quickly get to the rest of Europe.
Irish fishermen have dubbed no deal an “unmitigated disaster” for its industry.
Irish hauliers say there will be “catastrophic consequences” for their field, too, especially in the first few weeks after the transition period is up.
Leo Varadkar and Micheal Martin
Where a no deal Brexit would hit hardest across the remaining EU states
Ireland was widely considered to be the nation which would be most affected by Brexit, either with or without a deal, due to its shared border with Northern Ireland and its distance from the rest of the EU.
Yet, a debt ratings agency, Standard & Poor’s (S&P’s), has rallied in support.
The firm released a report last week which suggested the Irish economy would be able to rebound from the coronavirus crisis, and would only be “dampened but not derailed” if the UK does not agree to a deal.
The report then said: “The recent decision to continue negotiations to reach a trade accord between the UK and EU means that we are maintaining our base-case assumption that a limited free trade agreement (FTA) will be agreed prior to year-end.
READ MORE: Irish fishermen ‘fear influx of French vessels if UK waters protected’
President of the European Commission Ursula von der Leyen said the outcome was not yet clear
“Nevertheless, given the substantive issues that remain to be resolved and the limited time available, the talks might still flounder.”
The economy in the Emerald Isle shrunk by 6.4 percent over the last year due to the Covid-19 crisis.
But, S&P’s predicted that the underlying Irish domestic economy will grow 4 percent next year if a basic free trade agreement is reached.
If there is no deal, the food and agriculture sectors are expected to be hit the hardest from the World Trade Organisation tariffs.
But even then the UK is not Ireland’s largest trading partner.
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The US is the largest external market for Ireland, and Belgium is its second largest — while the UK is third, responsible for 28 percent of all goods exported.
Ireland’s Central Statistics Office (CSO) reported in 2017 that among large businesses that export, only one percent are dependent just on the UK market, while for small businesses it’s about 26 percent.
This would enable the nation to get back on its feet following a no deal Brexit.
S&P’s report also claimed that a no deal at the end of the year does not mean a trade agreement will not be reached later.
UK chief negotiator David Frost is continuing to hash out the final details of a potential deal
It explained: “We think the loss of goodwill that would stem from this potential rupture could make it difficult for the EU and UK to resume trade negotiations quickly.
“Still, we don’t rule out the possibility entirely — if, for example, the disruption caused by no deal leads to significant social unrest or extreme market volatility that risks investor confidence.”
However, most reports have suggested that no deal would be disastrous for Ireland.
Taoiseach Micheal Martin also said that such a scenario would “be very bad news for all of us”.
Ireland imported £18.3billion of goods from the UK in 2018 — more than from any other nation.
These would then face tariffs, which could increase prices for Irish consumers and input costs for manufacturers.