Irish exports may suffer should British household consumption take a hit post-Brexit – O’Brien

Published on: 17 August 2017

Fianna Fáil Spokesperson on Foreign Affairs and Trade, Darragh O’Brien TD has said that as Britain have revealed its plan to request exemptions for all small traders and farmers in pursuit of avoiding EU border posts, Ireland’s emphasis must be placed on negotiating a deal in the interests of all Irish exporters.

The Deputy commented, “Following the publication of two UK Brexit position papers, I have serious concerns for Ireland particularly regarding future customs arrangements and trade agreements.

“It is essential that the EU negotiating team works to avoid the establishment of trade barriers in the agri-food sector and highlights the need to continue to develop Ireland’s all-island energy market.

“Despite confirming that they will leave the single market, the British Government supposedly prioritises barrier-free trade with Ireland. Furthermore, while it will exit the customs union, the UK have seemingly made it a priority to avoid the introduction of a new border around Northern Ireland.

“It is therefore becoming increasingly apparent that the British Government is determined to retain all of the benefits of EU membership but without meeting any of their obligations.Their negotiating position is going to be extremely difficult for Europe including Ireland to agree upon. It highlights the folly of Britain insisting to leave the customs union in the very first place.

“I have been clear on the importance for the UK Government to reaffirm its commitment to the Good Friday Agreement and the Common Travel Area; however, there are other elements of Brexit that are as potentially detrimental to Irish interests but have gained less traction.

He added, “British consumption to date has held up well, and the Irish export figures support that. However, much analysis over recent months has shown that there is potential for this rate of current consumption to become reliant on credit including personal loans, credit cards or lower savings.

“The British inflation figures announced this week indicate that it has remained at a steady 2.6%. At the same time, regular wage growth averaged just 2% year-on-year in the second quarter of 2017. In real terms wages are going down.

“The obvious fear is that if Sterling depreciates even more, British price inflation will continue to rise. Should household income fail to match that, money must come from credit in order to keep consumption going at its current rate.

“When this credit runs dry the British consumer will have no choice but to cut back on consumption and it will be at this point that Ireland may feel the full effects of Brexit on Irish trade and exports.

“The measly €3 million euro that was allocated in last year’s Budget to diversify Irish exports market is woefully inadequate for Irish trade and business to possibly deal with the immense challenge that is quickly approaching,” concluded Deputy O’Brien.

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