Worst-case scenario Brexit deal could cost Irish economy €18bn, report finds

Maricruz Casares
Febrero 15, 2018

The impact study was compiled by Copenhagen Economics and commissioned by the Department for Business, Enterprise and Innovation.

That European Economic Area (EEA) scenario, similar to the type of arrangement which now operates between the EU and Norway and Iceland, would see a 3.3% drop in exports and a 3.5% fall in imports.

A World Trade Organisation, or no-deal scenario, would have the most impact gradually reducing GDP growth by 7% by 2030. The report states that 82% of employment in agri-food, the beef sector and the dairy sector are outside Dublin - and all three face a Brexit impact to exports and production which far exceed the national averages.

It stated Brexit will have a negative impact on Ireland in all scenarios, even with a soft exit.

The large majority also want to stay in the Single Market after Brexit, believing that securing a Free Trade Agreement (FTA) giving some access to the Single Market is significantly inferior to remaining a full member and nearly all companies believe that a so-called "Hard Brexit" - leaving the European Union without an agreement and relying on WTO rules - would be a disaster.

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Pharma-Chemicals could see production fall by 1% to 5% compared with non-Brexit 2030 levels, while production in electric machinery could drop by between 5% and 10%.

"Of the scenarios analysed in this report, the EEA-scenario is the outcome that would minimize the economic loss (in GDP) for Ireland in the EU-UK trade negotiations", it said.

The study does not suggest the Irish economy would shrink in absolute terms.

The rise of non-tariff barriers, specifically due to regulatory divergence, is the main factor driving the results.

The full Ireland and the Impacts of Brexit can be read here.

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