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Irish firms exposed to UK market may move operations

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Some manufacturing companies in Ireland are looking at getting their goods made in the UK instead of Ireland, to avoid potential barriers or tariff to trade.


Andy jalil -


andyjalil@aol.com -


With increasing fears that Britain could pull out of the single market with Brexit, concerns are rising in Ireland that some companies that are involved heavily in business in the UK could shift operations there.


As Enterprise Ireland (EI) warned exporting firms to prepare for a so-called ‘hard’ Brexit, the Irish Exporters Association (IEA) reiterated that some manufacturing companies in Ireland are looking at getting their goods made in the UK instead of Ireland, to avoid potential barriers or tariff to trade.


This has come after the British Prime Minister, Theresa May, hinted that Britain may leave the single market and pledged soon to make public her plans for Brexit. Enterprise Ireland Chief Executive, Julie Sinnamon, said the agency is informing firms they need to be prepared for whatever Brexit brings.


Sinnamon said: “What we have to do is plan for a ‘hard Brexit’. If it turns out to be better than that, so be it, but we are telling our companies you have to plan for a ‘hard Brexit’ and put in place the building blocks today to be able to deal with whatever Brexit throws up.”


May had said in her interview on Sky TV last week that the UK would be able to control its borders and suggested the country would seek its own trading deal with the rest of the European Union post-Brexit.


May’s comments suggesting that the UK might leave the single market caused concern not only to Ireland, Britain’s biggest trading partner, but to other EU countries which have business commitments with the UK. Reiterating that Britain would be able to control its borders and suggesting the government would seek a bespoke trade deal with the EU post-Brexit, May repeatedly fudged the question of whether Britain would remain in the single market. Severing ties with the EU could mean leaving both the single market and the customs union.


At the launch of its end of year results, Sinnamon said that by preparing for a ‘hard Brexit’, firms that are exposed to the UK market have to be as innovative and competitive as possible. She urged companies to look at alternative markets.


“Companies are also developing strategies in terms of hedging and sourcing to be able to reduce the exposure (to the UK), but long-term what we are seeing is a strategic shift and people will have a look at a long-term plan and balance their markets more so than they have done in the past,” she said.


Head of the Irish Exporters Association, Simon McKeever, said companies in Ireland remain concerned about access to the UK market, to the point they are either looking at manufacturing their products in Britain instead of Ireland, or shifting staff.


McKeever said: “When Brexit actually happens and they (Irish companies) want to maintain market share, they will need to either put more people over there, and because the UK market is so big for some companies, they may have to start producing goods over there to avoid any kind of barriers to trade.”


He said the currency pressure had been taken off companies in the run up to Christmas as the pound had (then) gained in strength. But he said that changed and then could change again as the deadline for triggering Article 50 nears.


“As we move towards this end of March deadline with Brexit, I would have thought that you are going to be heading into more volatility on the exchange rate which will bring some of that back. Companies need to make long-term plans.


If you’re afraid the UK is going to be outside of the EU, it’s not really about the exchange rate, it’s more about the tariffs and the invisible barriers to trade,” said McKeever.


He added: “If 25-40 per cent of your business is in the UK, and you can produce the thing cheaper over there, labour is cheaper, there’s good support from the British government to set up businesses in the unemployment areas, you’d want to be considering it.” Meanwhile, Enterprise Ireland (EI) announced more than 200,000 people are now employed by Enterprise Ireland-supported companies — the highest in the history of the agency.


A total of 19,244 jobs were created in EI-backed companies in 2016, with a net increase, when jobs losses are taken into account, of 9,117.


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