Brexit: The UK’s difficultly is Ireland’s opportunity

Aaron Reen highlights Ireland’s opportunities in the wake of Brexit


In what the Prendervost would surely style as a phoenix from the ashes-esque process, a new business school will emerge from the rubble of Luce Hall. And in this, “the physical home of Ireland’s new generation of job creators”, economist David McWilliams will be an adjunct professor. This suggests he’ll have his name on an office door or deliver sparse weekly lectures or both. It must be said that McWilliams has been associated with the Executive MBA Programme. What that’ll mean on the ground remains to be seen. It cannot be denied though, given that national discourse is – so often and justifiably – economic in tone, McWilliams will add to the standing of Trinity’s business school.

This trend is amplified when affairs in the public domain have overarching economic implications. And it has been thus as Britain’s decision on EU membership approached and passed. McWilliams’ almost offensive, yet somehow endearing South Dublin drawl has been a regular feature on the airwaves. My ears pricked as he offered his two cents with respect to Brexit’s impact on Ireland. It went something like this:

“Brexit may actually be good for us in the long term, particularly if the damage to the UK’s investment image is as bad as the Remain camp claims it will be if the UK leaves. Clearly, British-bound investment will be diverted elsewhere. Remember, our country is 15 times smaller than Britain and therefore we only need a small amount of that diverted FDI for it to make a massive difference.’’

Now, what McWilliams says is perfectly rational. And with British companies haemorrhaging capital investment, perhaps his theory should be applied right now. To quote Matthew McConaughey in the Wolf of Wall Street, ‘‘it’s a fugazi’’ and I feel fairy dust headed our way. But the proverbial mansion on Long Island is dependent on one key ingredient: a material change in Britain’s relationship with the EU. Sure, the markets have been sent into speculative overdrive. But the simple fact is that the referendum was advisory in nature. Executive action must be taken to enact the will of the British people. In short, the UK has not exited the union. Not yet at least.

Without getting into Guardian-touted conspiracies surrounding Cameron’s scorched earth exit from No. 10, it seems heir-apparent Boris Johnson hoped his fellow Etonian would do the dirty deed and invoke Article 50 immediately. Why else would his ‘victory’ speech – which was limper than a wet noodle, I might add – be followed by his pulling out of the Conservatives leadership race? The narrow margin of the Leave campaign’s victory, having to affect the exit without the unified backing of one’s party and the uncertainty that would prevail thereafter mustn’t have matched up with Johnson’s calculations. He wants to be the captain (what is it with this nautical theme?) but believes the prospect of leaving port (I’ll indulge anyway) to be a political cyanide pill.

Here’s the important thing. With the Bullingdon Club alumni sending each other to the wall, Ireland has grown or has the potential to grow in diplomatic stature. Why? Because we can position ourselves as brokers between two opposing entities. A European order (sans Merkel, perhaps) that wants the UK ejected into the North Sea ASAP. And the British elite looking to wean themselves off Brussels gradually. I’ll fly the nest (maybe) but not quite yet, mother dearest.

Qualifier: Iveagh House hasn’t turned into the front room of Europe. Enda Kenny isn’t some sort of elder statesman who’s at once detached and omnipresent. He’s not reclining contently in the corner seat, waiting to step in as his two grandchildren battle over rights to the sweet stash (viz. access to the world’s largest trading bloc and the 51 trade agreements which that bloc has in place with outside states). In reality, this fight is in distressing proximity to the fireplace and Ireland is at equal risk of being drawn into the flames. A Luce Hall-like reincarnation doesn’t seem inevitable either.

The potential to get burned lies in our extensive economic ties with the UK. You all know the general outline and I won’t bore you by summarising here. But take the milk manufacturing industry as a specific example. Many cattle farmers in Northern Ireland send their milk across the border for processing in the south. So much so that in December 2014, Glanbia opened a milk protein facility in Virginia, Co. Cavan to the tune of €7.8 million. It draws partly from Northern producers to create products for use in the clinical nutrition and sports and consumer foods industries. With the UK outside the union there could well be customs checkpoints running from Warrenpoint to Derry. This would obviously obstruct the flow of milk from north of the border. Some form of accommodation might be reached, you say. Even still, anything manufactured in the Virginia plant or any similar operation could not bear the “produce of EU” label – a marker which boosts consumer confidence in an export heavy sector.

With Avonmore Protein Milk and #gainz in jeopardy, the Irish government could do worse than to extend an arm of friendship to the old enemy. Of course, we are firmly invested in the European project and don’t want to antagonise our partners there. But in the case of milk manufacturing and so many other areas of economic activity we’re wedded to Britain. A prenup is not an option (OK, I’ll stop).

In an age when the EU is coming under fire for being antiquated, we should also bear in mind that Ireland always envisaged John Bull occupying pride of place in that institution. Our initial (and arguably, continued) membership of the same community was predicated on the UK’s presence. Indeed, in January 1963, Charles de Gaulle vetoed Britain’s application to join the then European Economic Community. ‘Grandeur’ or something got in the way. At any rate, Ireland’s simultaneous application was withdrawn immediately thereafter. A Europe without the UK was one not worth joining.

And so, amongst other factors, we’ve a strong economic and historic interest in keeping Britain engaged with the EU. That is something which seems to be reciprocated in Westminster. What’s significant here is that once the Conservatives stop passing the hot potato and get down (if they ever will) to the business of negotiating, they’ll be facing some 27 representatives – at least one of which will be Irish. This means, by way of shared aspirations, we’re of massive use to Cameron’s successor and could, as a result, play a leading role in navigating the UK to calmer waters.

As queried on an underappreciated Gorillaz’s track: ‘’Where’s North from here?’’ It’s difficult to say. The starting point should be to preserve the economic status quo, in so far as that may be possible. The structures with which we do business with Britain are of real value and hopefully they can be carried over into the post-Brexit environment. High tariffs and other such commercial barriers have to be avoided. Given our bolstered diplomatic position, proactivity on this issue could secure a “Leave” settlement not only of benefit to Ireland but also to Europe and the UK. After all, a union with straightforward access to the fifth largest global economy is a stronger union. And the same applies in reverse order. Symbiosis is the name of the game.