FTA Ireland (FTAI) is pressing negotiators to consider the impact of a potential ‘no deal’ result for the ongoing Brexit negotiations.
As Aidan Flynn, FTAI’s general manager says, the outcome could bring Ireland’s supply chain to a halt which could cripple business across the country:
“The Brexit clock is ticking,” he says, “and with just 11 months to Brexit day, 29 March 2019, time is running out if the administrative burdens of new trading arrangements are to be smoothed over. What and how the proposed transitional period is to work has yet to be agreed, and this will pose significant challenges for businesses and employment for all if the detail is not confirmed soon.
“It is unthinkable in this day and age, where so much effort has gone into driving efficiencies in the supply chain and developing the ‘just in time’ model of supply chain, that the clear and present danger is in the hands of politicians (on all sides) who are playing chicken to see who will blink first in determining the future outcome of the Brexit negotiations. The consequences of this will be felt across the sector, as well as ultimately by the consumer, who will inevitably pay more for less choice. Efficient trade links between Ireland and the UK are critical to the Irish economy and supporting jobs throughout the island of Ireland. Our geographic location dictates that this cannot and must not change.”
A recent mapping scenario research exercise carried out on behalf of FTAI by the College of Business in Dublin Institute of Technology (DIT) found that in the event of no agreement between the UK and EU, an increase in logistics costs and transportation lead times would be inevitable. The mapping model found that applying a hard border would have a damaging effect on business performance. To deal with changes in the border, companies would have to improve efficiencies drastically to combat the delays that occur: FTAI calculates that a one hour delay to goods at the border could cause knock-on delays of up to four hours, which would have a significant effect on the bottom line for business and manufacturing. To help its members prepare for Brexit, FTAI is carrying out ‘Brexit health checks’ to review and understand how current practices may be affected by Brexit.