Joint fund needed to ‘reboot’ British-Irish trade in wake of Brexit

The British Irish Chamber of Commerce has called for the establishment of a fund to "reboot" the economic relationship between the Republic and the United Kingdom in the wake of Brexit.

In a pre-budget submission, the chamber urged both governments to establish a collaboration fund to enhance trade ties and foster research initiatives between the two jurisdictions.

The group also also called for the introduction of targeted supports for Irish agri-food traders facing new trade barriers.

Last week, the UK postponed a range of post-Brexit checks on imports from the European Union for a second time amid increasingly strained relations between London and Brussels.

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The new border controls – mainly relating to food – would have added a further layer of bureaucracy at a time when trade is already being frustrated by increased paperwork.

Excessive paperwork

Marks & Spencer said last week that post-Brexit rules and “excessive paperwork” had forced it to cut about 800 lines from its stores in the Republic, roughly 20 per cent of its total range of goods here. Irish-British trade is worth an estimated €90 billion a year and supports more than 400,000 jobs.

While Irish trade figures show a pick-up in exports to Britain and a pick-up in North-South trade, imports from Britain to the Republic are down by a third since the start of the year. Trade between Britain and Northern Ireland also appears to be significantly impacted but official figures have not yet been published.

In its submission, the chamber called for the introduction of a scheme similar to the UK’s “Movement Assistance Scheme” to support traders moving agri-food products and safeguard them against any future trade interruptions across the Irish Sea.

It also recommended the Government adopt key measures to keep Ireland competitive, including leveraging other taxation levers to attract foreign direct investment and the reform of the capital gains tax.

To facilitate greater economic collaboration in a post-Brexit context, it called on the Government here to expand the State’s diplomatic footprint in the UK so as to develop trade links to regions beyond London and create an oversight group to ensure the €1 billion from the EU’s Brexit adjustment fund is deployed effectively to the worst affected sectors.

Difficulties

This could potentially be used to fund Ireland’s research agencies to enhance their presence in the UK.

"Although the EU-UK Trade and Co-operation Agreement has given businesses across these islands much needed certainty, the new trading relationship is not without its difficulties and obstacles," Paul Lynam, director of policy at the British Irish Chamber of Commerce, said.

“ Irrespective of the extension of grace periods, these challenges are only set to multiply with new customs requirements and border controls set to be introduced over the coming six months,” he said.

“Budget 2022 can help vulnerable firms to navigate the changes that lie ahead while rebuilding the ties that bind our two islands together,” he said.

“A new ‘Shared Islands Fund’ is one innovative way of rebooting Ireland’s economic relationship with our nearest neighbour. Through investment in areas ranging from research and innovation to energy, we can herald in a new era for UK-Ireland trade,” Mr Lynam said.