Over the last 40 years, the relationship between the UK and Ireland has gone from strength to strength. For me – as for many others of my generation – watching this process has been a welcome, though somewhat unexpected, privilege.
The depth of the relationship between Britain and Ireland can be explained not only by our common language, shared history, values, and culture, but also by our economic co-dependence. Indeed, Britain and Ireland are joined at the economic hip.
The value of British-Irish trade currently stands at €57bn annually and sustains 400,000 jobs throughout the two islands.
We owe much of our ability to build and maintain this many-faceted friendship to our common membership of the European Union, and many shared perspectives as to how the EU should evolve.
Across trade, travel, infrastructure and industry, the EU has been a key enabler of the unprecedented bilateral success, and it yields the possibility of even greater success in the years to come.
Ireland represents one of the strongest EU markets for the United Kingdom. It is fifth most valuable goods export market for the UK – ahead of China and indeed equal to all the BRIC countries combined.
In turn, Ireland finds its second largest merchandise export destination in the UK, and the largest for its services. In 2015, the UK accounted for over 16 per cent of Ireland’s total goods exports.
However, there is growing uncertainty over whether this success can continue. The forthcoming referendum on the UK’s membership of the EU has prompted many partners, not least Ireland, to look on with concern.
While the Chamber is clear that this decision is one that will be made by UK voters alone, it urges them to recognise the gravity and the irreversible nature of that decision.
The fact is that a British exit from the EU would place unnecessary barriers in the way of trade, investment and employment in both countries, and throughout Europe. Equally important is that the single market would lose its strongest advocate.
Estimates from the Economic and Social Research Institute suggest that a Brexit is likely to significantly reduce bilateral trade flows between Ireland and the UK by 20 per cent or more and lead to a consequent drop in average incomes in Ireland of over four per cent.
Even with a subsequent bilateral trade agreement, non-tariff barriers such as customs controls, or technical barriers could be reintroduced and there may also be specific tariffs liable on imports from the UK.
This will have an effect on the Irish chemical and pharmaceutical sectors, which account for a large share of exports to the UK, but also sectors such as agriculture, food, beverages and basic metals, which are relatively more dependent on the UK market.
Many unexploited opportunities still remain for British-Irish industry. Sectors such as energy or financial services, where the islands already play complimentary roles, offer significant scope for expansion. The UK government’s Northern Powerhouse project also plays to the strengths of our existing ties; there is already huge trade between Ireland and northern cities such as Manchester, Liverpool and Leeds.
We should be focusing our energy on seizing these opportunities, and tackling the issues that will further cement our already close ties. Ensuring our economies are powerhouses of production and productivity, and investing in the skills of tomorrow’s industries are all challenges we must overcome to usher in another forty years of prosperity for Britain and Ireland. Working together within the EU we can sustain, and indeed, intensify the drive for reform.
It is my hope that we can put this costly and introspective debate behind us as quickly as possible in order to focus on the challenges that will continue to help British-Irish business thrive and prosper.
John McGrane is director general of the British Irish Chamber of Commerce, and served over 40 years with The Royal Bank of Scotland and Ulster Bank Group in Ireland. The British Irish Chamber of Commerce represents business on both sides of the Irish Sea interested in operating in the joint economic space. For more information, please visit the BICC website
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