Brexit Impact on Ireland Economy & Business
The following piece of work is written down to make the students aware of Brexit which is a global topic these days. The impact of Brexit on the Irish economy should be known by the economics students studying in the Irish Universities because it not only affects directly the economy and trade of the country but also their education sector.
We are providing the students with a general outlook and view on this in the form of a sample that could be used as a reference by them when they’re working on any such projects and assignments about this topic. The essay writing services are being provided by us in any case of discrepancy or difficulty faced by the students while making their economics homework.
The term ‘Brexit’ means it is the withdrawal of the United Kingdom from the European Union which happened on 31st January 2020. This has caused an impact on the economy of many states and its withdrawal is governed by the European Union government by Article 50 of the Treaty on European Union. It is drafted by Lord Kerr of Kinlochard.
The Article states that any member or state can withdraw following the constitutional provisions notifying the European Council. Two year negotiation time is being provided between the European Union and the state that is leaving. They may strike an agreement and if there is no agreement then the membership ends. The agreement needs to be ratified by the qualified majority in the Council and the Parliament.
10,000 Irish students were attending universities in the UK and an 18% drop has been seen after the Brexit vote and more demand for undergraduate studies in Irish Universities.
The issues that are covered after the withdrawal agreement. The purpose is to set a process to allow the UK to leave the EU smoothly.
- Agreeing on a transition period and it’s a way of work
- How to prevent the need for checks along the Irish border
- UK’s financial settlement with the EU.
Irish border between the UK and the European Union
Following the Brexit, the 310-mile land border is lying between Ireland and the Republic of Ireland and is the only border between them.
Theresa May, the former Prime Minister of the UK initiated the withdrawal process on 29th March 2017 and the process was further extended to 31st October 2019. She initiated Irish ‘backstop’ which didn’t go well with the Parliamentarians and forced her to resign after many members said that such a deal will keep UK in close ties with the EU.
In October 2019, Boris Johnson removed the Backstop and replaced it with the Northern Ireland Protocol. Under this protocol which will start on 1st Jan 2021, it will continue to follow EU rules making border checks unrequired. This kind of setup means that certain goods arriving in Northern Ireland from parts of the UK will need to be checked to make sure it complies with EU standards.
If any tariffs to be paid, they will be refunded if the goods remain in Northern Ireland and no onward movement to the Republic of Ireland.
In September 2020, the UK government was to bring changes to the Northern Ireland Protocol by amending the laws in it. It is to bring clarification to avoid disruption in Trade. International law can be amended in a limited space.
Positive Impact Of Brexit On Irish Economy
1) The Irish economy has been rapidly growing and it creates the job market. The market has grown rapidly in the year 2018, Ireland created 50,000 jobs and has seen an increment of 6.7 % hike than the previous years in the job market. The government has become resourceful and can extend financial aid to the people and staff are hired at a huge amount and the market is performing better than the previous decade.
2) Irish business is facing not only Brexit but also a shortage in skills, high costs, and intervention in technology that has created corporate risks, climatic change, trade wars but the economy is booming and is ranking on top in terms of standards and techniques.
3) In the global market the competition is increasing day by day and Ireland has become an open competitive market and with a rising economy also scoring well at a global level. After Brexit, it is topping the list of European cities into which UK banks are transferring activity, according to the EY Financial Services Brexit Tracker.
Brexit impact on FDI scale
The Republic of Ireland has gone one degree down to 20th in a ranking of the top countries for foreign direct investment (FDI) with Brexit responsible for the uncertainty. “On the one hand, Ireland’s trade relationship with the United Kingdom makes it the economy most vulnerable to Brexit.
On the other hand, some of the potential trade losses may be at least partially offset by Ireland’s strong sustainability with the post-Brexit UK as an investment destination,”
The country ‘has long been among the most competitive markets globally for FDI attractiveness,’ The Republic shall be established as the European leader in Europe by 2026 “will be a lead labor force in the 21st-century digital economy and has likely helped Ireland to become the top FDI destination for US technology companies.”
The impact on trade and local businesses in Ireland
The majority(90%) of microlevel businesses are being run by even less than 10 employees. The small businesses(8%) employes around 10 and 49 employees. Business or trading with the UK puts currency at risk, trade tariffs, and new regulations. While 85% of the Irish enterprises export goods to the UK. Half of the firms are exporting to the UK.
Supply chains are adversely affected as the majority of the products are being imported from the UK and less is exported so the demand chain is high while the supply chain is affected as a result of it. The other medium level and other business are also effected as it leads to a contraction in the Irish economy. This also starts with the culture of startups.
AIB Brexit Sentiment Index Reports that one in three small and medium enterprises have either postponed or canceled investment plans due to Brexit. Innovation and technology are vital for economic growth by increasing the productivity level of job growth and therefore later investments cause barriers in activities of small businesses and their growth which in turn affects our economy. 90% of business are excluded from surveys of innovation.
The survey says that by 2030 the Irish GDP will be 72.8% if UK does not leave the EU. Taxes will lead to a 7% reduction of Irish GDP. Both export and import will be damaged especially the agricultural food, pharmaceutical chemicals, machinery, transportation, retail, and web companies.
Ireland is trying trade negotiations with other partners so that Brexit will have the only effect on Border and not on the goods and economy. Ireland can negotiate with South American countries, Australia and New Zealand New FTA’s will facilitate trade with Japan and Canada.
Few Risks associated with Brexit for the Irish economy
It will pose threat or risks to commercial and consumer life in Ireland. This includes the delays at the English Ports leading to trade hampering and regional impact.
Daily life is also at risk of online retail, personal data exchange, financial shopping, etc. if the land bridge through Britain is lost.
Any unilateral departure by the UK from the Brexit agreement could seriously damage the trade relations and the political, economic trust.
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