Brexit beckons and despite British prime minister Theresa May’s assertion that there will be a “frictionless border”, the future of the UK’s relationship with Ireland and the rest of the EU is still very uncertain, writes John Whelan
What is clear is that movement of goods to and from the continent — as well as to the North — will be significantly affected unless there is a u-turn on the customs union membership. This is likely to create more political chaos in the UK this year.
Businesses are increasingly accepting the inevitable re-emergence of borders with the UK and are planning accordingly.
Goods for sale in Ireland are commonly shipped from countries such as China through the UK, where all paperwork tariffs and customs are completed as the first point of entry into the EU.
They are then in free circulation within the EU and shipped onwards to ports in Ireland. This will change after Brexit.
Dublin Port is getting ready for the “inevitability” of border controls shifting to them, following the UK’s departure from the EU.
Last week’s launch of the colossal freight ship the Celine by the Taoiseach is part of the port’s plans to support exporters and importers to continue trading efficiently with mainland Europe post-Brexit.
It expects to finish the building work this year for new customs booths and freight inspection points.
The vast bulk of Irish exports to the continent are routed across Wales and England and onto mainland Europe.
It is impossible to overstate the importance of the British transit route; some 80% of the Irish road freight that reaches mainland Europe passes through the UK.
Currently, these trucks pass through without any customs or other official scrutiny. Post-Brexit, with the UK outside the EU, double checks at both entry and exit will need customs regulatory clearance.
The Port of Cork Company has ramped up talks with continental ferry companies about providing more direct freight routes between Ireland and mainland Europe due to Brexit, but Brendan Keating — its chief executive — has called for more EU investment to support the port’s own efforts.
Britain is, itself, a crucial export market for Ireland, buying a total of €16 billion worth of goods last year as well as buying half of the country’s exported beef and 42% of its food and drink.
But continental markets are far more valuable to Irish exporters, with €48bn-worth heading to the EU26.
The many multinationals located in Ireland who, over the decades, have built up their complex supply chains across the UK and into the continent, have already taken pre-emptive moves to handle the post-Brexit emerging borders. Some are separating out their UK business for relocating there.
But avoiding disruptions means reforms beyond the logistics problems.
Contracts between UK and Irish-based companies will need to spell out who is responsible for VAT.
It would make sense for the UK party to the sale to handle imports into that country rather than have the Irish company establish tax and VAT registration there.
John Whelan is a leading Irish consultant on international trade