Brexit still means Brexit for this island
One of the notable features about the coverage of the UK election results has been the overuse of the word “historic”.
Pundits and politicians alike have been scrambling to pace the Tory landslide and the Labour collapse in the context of previous election wins and losses dating back a century.
History, of course, does matter.
A general election result in any democracy is far more significant than the welter of opinion polls and online surveys that most days constitute the news. A decisive general election outcome provides a fulcrum for the levers of real change in the way a country is governed.
What is also historic is the extent to which the outcome of the UK election will directly affect the economic prospects, not just of the UK, but also of this country.
It is now clear that Brexit will go ahead. It will go ahead most likely in the format Boris Johnson agreed with the EU last October, but which was not ratified by the UK parliament.
That means the UK will withdraw from the EU in the New Year but will remain a de facto member for all economic and regulatory purposes until the end of 2020.
It also means that after 2020, Northern Ireland will become in effect a dual customs zone; it will be partly in the UK customs environment for imports and exports to Britain, but largely treated as being within the EU customs environment otherwise.
Is this what the voters in North actually intended to achieve? Among the business community in the run-up to the general election, there was more frustration over the lack of a Stormont assembly than the lack of clarity about Brexit.
A surely unintended legacy of the lack of clarity over the last three years is that the future UK-EU relationship will be developed against a backdrop of a much-hardened EU approach.
During that time the EU attitude towards the UK has changed from seeing the UK as being a future trading partner to seeing the UK as being a future competitor.
Brexit planning by Irish businesses is not an optional extra but must go ahead. There will be disruption to supply chains from December 31 next year, even if that disruption only involves additional paperwork and bureaucracy in terms of getting goods in and out of (and for that matter through) the UK to other destinations.
It’s not clear yet that Irish exports will be badly compromised by the imposition of tariffs after 2020 — that will have to be determined in the trade negotiations — but exporters to the UK will need to factor in that possibility to their medium-term plans.
There are other relevant lessons from history beyond election polling comparisons. New Zealand has featured in news reports for tragic reasons last week.Following the UK election outcome, some New Zealand commercial experience should also now have a particular resonance here.
That country experienced major disruption to itsimport-export model when their critical trading partner at the time, the UK, joined the EU predecessor, the EEC, in 1973.
That forced diversification into new products and, crucially, new markets. There are direct parallels between the New Zealand experience and what may be in store for Ireland post-Brexit.
Whatever people might think about the political consequences of the outcome of the UK election, its cementing of Brexit is bad news for many business interests on this island.
Industries which might have taken their foot off the pedal in Brexit preparations now need to refocus. History may not be kind to us if we have not prepared.
