EU views North as a new Berlin in Brexit talks

There is room for a special deal on the North in any Brexit deal. 

EU views North as a new Berlin in Brexit talks

That was the message from Rainer Wieland, the vice president of the European Parliament and a member of Germany’s Christian Democratic Union (CDU) party, when speaking in the European Commission office in Dublin last week.

“We always included a special clause for Berlin in all our EU agreements when it was part of eastern Germany,” he said saying he saw the North a similar position to Berlin in those years — inside the EU but outside the old West Germany. Businesses in the North seem to be of the same opinion, with most surveys showing that companies have yet to experience any real fallout from the Brexit decision.

In line with this, the majority indicated that they had adopted a wait-and- see approach, stating uncertainty makes it too difficult to plan.

The picture is further supported by Invest NI, the government body responsible for inward investment to the North, attracting record numbers of new foreign investors in 2016 — more than half of them since the Brexit referendum, according to the company’s annual report. Foreign investors are particularly attracted by the North’s pool of human talent, according to Invest NI figures, with about 16,000 annual graduates and postgraduates coming out of Belfast’s universities every year.

Exports also have been rising this year, particularly sales into the Republic, assisted by weaker sterling.

However, there is growing business frustration that the Northern assembly is still gripped in a political deadlock that is preventing the formation of a new devolved executive. Amid the current uncertainties, local investment promotion authorities and businesses are left alone in their efforts to weather the uncertainties of the Brexit storm.

If Brexit has not affected the North’s current investment proposition, so far, it has indirectly delayed its development. The current political impasse is delaying devolution reform and the planned introduction of a long-promised 12.5% corporation tax rate , which may now become hostage to Brexit negotiations.

Despite the deadlock in Belfast, the eyes of local businesses remain focused on the talks unfolding in Whitehall and Brussels. While the risk of a hard border is of wide concern, only big firms seem to be adjusting their strategies accordingly.

Michael McKeown, head of Newry’s chamber of commerce maintains the delays in corporation tax reform are a minor disappointment compared to the prospect of a hard border, saying “everything comes down to this word: border.”

InterTradeIreland estimates that 91% of the North’s companies, its core of SMEs, are not preparing for any Brexit outcome that includes some sort of border.

Michel Barnier, the chief EU Brexit negotiator, has also been trying to give some guidance to the UK government, suggesting the North could continue in the EU single market after Brexit.

Minister for Foreign Affairs and Trade, Simon Coveney, has been keeping his powder dry, ahead of next month’s Brexit summit, knowing that essentially he has a veto in this phase of talks as the Border is one of the three key issues that must be resolved before the Brexit negotiations can move on to trade.

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