How the Brexit catastrophe turned out to be a mere inconvenience

• Published date: 15 April 2024
• Publication title: Irish Times (Dublin, Ireland)

It certainly beats the Y2K fiasco of 1999 which had a much shorter lead-in period and disappeared almost on the stroke of midnight when the technical Armageddon predicted in some quarters morphed into a manageable computer glitch

For the four years between 2016, when UK voted to leave the EU, and the country’s formal exit in 2020, the implications of our nearest neighbour and biggest EU trading partner exiting the bloc approached us like an asteroid.

Warnings about the potential loss of trade and the threat to the peace process saturated the media cycle. At one point, it was predicted that Ireland might suffer greater economic harm than the UK itself.

We became au fait with the intricacies of a customs union. We analysed the ramifications of a hard and soft Brexit in exhaustive detail. In the months before the UK’s official exit in 2020, the government set up a Brexit contingency fund, companies stockpiled goods, citizens braced themselves for a recession.

In the end, the whole affair, from Ireland’s perspective, didn’t exactly blow over, but it was absorbed without the disruption and economic fallout that many had predicted.

Irish exports, long seen as the first line of defence, rose by 9.5 per cent in 2020 and by 14 per cent in both 2021 and 2022, reflecting increased activity in the State’s big pharma and IT industries, both of which prospered during the pandemic.

But even food and drink exports, which are heavily reliant on the UK market, fell by only 2 per cent in 2020 (largely on account of pandemic-related closures to food service businesses abroad) before rising by 4 per cent in 2021 and by a significant 22 per cent in 2022.

Exports (including food exports) fell last year, but for reasons other than Brexit.

Of course, there are problems ahead for food exporters here.

UK border controls on agricultural imports from the EU (including Ireland) are due to be implemented at the end of the month and could prove a significant obstacle.

According to the European Commission, the physical checks, health certificates and identification protocols on goods entering the UK, if fully enacted, will represent a 10 per cent tariff-equivalent increase for EU companies.

Brexit has also forced many businesses to ship goods to Europe along different supply routes.

“A lot of the existing transport and logistics costs have been carried in margins,” says Ibec’s chief economist Ger Brady. “That might not carry through in the long run, but if it does, this leaves less for...