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12 December 2017

The View from the Chair for December - Wilfred Mitchell OBE

The Road to Brexit still has many humps and hollows to travel

With almost 18 months passed since the historic EU referendum result on 23rd June last year, we have eventually witnessed the first progress in Brexit negotiations between the United Kingdom and the European Union; a 7,200 word document with text agreed by both sides of the negotiations. Much like the upcoming Christmas TV listings, the agreement can be interpreted as containing something for everyone; commitments to avoid a hard border on the island of Ireland and an undertaking to avoid east-west trade barriers. This is encouraging and hopefully avoids an obstacle, which led to the brakes being applied last Monday when agreement had seemed to be near. Guarantees that EU citizens in the UK, and UK citizens in the rest of the EU, have the ‘right to remain’ may bring a measure of comfort to those citizens who make a valuable contribution to the local economy and also give a degree of confidence to the businesses in sectors that have large numbers of EU nationals in their workforce.

The announcement of a breakthrough in the negotiations at this stage was welcomed by FSB members. However, as the caveat goes, “nothing is agreed until everything is agreed” and paragraph five of the agreed document makes clear that adaptations might be appropriate going forward, and the text does not prejudice discussions on the framework of the future relationship between the UK and EU. Therefore, we must also urge caution, as there is a long way ahead. The challenge is to maintain the aspiration and pressure to ensure that all issues the parties have agreed thus far are cemented in the final deal.

We are now about to begin the nitty gritty of trade talks which will define the minutiae, including what tariffs (if any) will be applied to goods moving between the UK and EU; how such a process will be administered, such as through technology or trusted trader schemes as proposed by the UK Government; and the various political consequences associated with alternative outcomes. Previously when we surveyed our members the EU was identified as the largest trading market for exports, therefore securing the easiest and least costly access to the EU single market should be a priority, while also looking to build partnerships with emerging markets such as China and India. By early 2018 there should also be a guarantee that there will be no cliff-edge moment on Brexit day but, instead, an orderly, time-limited transition period so that small firms only have one set of rule changes.  FSB Northern Ireland intends to survey our local members in the New Year on the impact of tariffs when importing and exporting and the effects of the Brexit decision to date, and will be using this information to inform our lobby work throughout the year of negotiations.

The geography of Northern Ireland and our unique political settlement means it is very likely that we will be the region of the UK most impacted by the exit from the European Union, given that the Irish border is most likely to become the UK-EU frontier; a position which brings threats as well as opportunities. Therefore, the current political impasse, which has seen no Northern Ireland Executive in place since January, is still a matter of major concern, as Northern Ireland begins preparing for a highly significant political moment. The Head of the Northern Ireland Civil Service, David Sterling, who has been described by some as the ‘Acting First Minister’, has said that having an Executive would greatly assist his own preparations for the public sector’s role in the process. Small business, too, craves the certainty provided by political stability.  In the absence of a devolved Executive, the voice of civil society has become even more crucial, of which business is a key part. As we now move into the nuts and bolts phase of the Brexit negotiations, those involved must listen to the thoughts, concerns and experiences of the typical businesses of Northern Ireland, who undoubtedly have a significant interest in the final outcome.