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The food and drink industry could face \u201cunbearable\u201d additional costs of \u20ac1.5 billion if a deal is not reached between the EU and the UK, an Oireachtas committee has been told.<\/p>\nThe food and drink industry could face \u201cunbearable\u201d additional costs of \u20ac1.5 billion if a deal is not reached between the EU and the UK, an Oireachtas committee has been told.<\/p>\n
Businesses could be plunged into chaos in January over the lack of clarity around how trade will operate on a day-to-day basis, it was also claimed.<\/p>\n
Negotiations between London and Brussels are ongoing this week, with both sides stressing that time is running out to strike an agreement before the end of the Brexit transition period on December 31st.<\/p>\n
While businesses have been urged to be ready whether a deal is struck or not, only 42 per cent of firms believe they are ready for the deadline, according to an Enterprise Ireland survey.<\/p>\n
The Oireachtas Joint Committee on Enterprise, Trade and Employment heard on Wednesday that Brexit poses a huge risk to Irish businesses\u2019 competitiveness.<\/p>\n
Fergal O\u2019Brien, director of policy and public affairs at employers\u2019 group Ibec, said: \u201cA no deal for businesses would mean that all of the other issues that still need to be worked out between the UK and the EU become a lot more difficult without the platform of the bare bones trade agreement.<\/p>\n
\u201cIf we are facing tariffs, in our food and drink industry alone we are dealing within the region of 1.5 billion additional costs and tariff costs on Irish businesses.<\/p>\n
\u201cThat is going to be an unbearable cost.<\/p>\n
\u201cGiven that it\u2019s less than four weeks out, how are companies expected to price their products operationally and from a commercial perspective into a UK market when we don\u2019t know whether there will be tariffs?\u201d<\/p>\n
He added: \u201cThe big challenge for the Irish economy from Brexit is risk to our competitiveness.<\/p>\n
\u201cWhen you look at the benefits that the UK and all of us being in the single market and the customs union had over a period of decades, those benefits have been very substantial for businesses and consumers.<\/p>\n
\u201cThe untangling over that is now going to happen almost overnight and it\u2019s going to bring a lot of extra costs to doing business.\u201d<\/p>\n
Tom Murray, a member of campaign group Border Communities Against Brexit, said the both sides of the border are \u201cpotentially\u201d facing chaos on January 1st.<\/p>\n
\u201cWe don\u2019t know if imports will come in freely, we don\u2019t know if we will be able to export freely, we don\u2019t know what level of paper work and VAT schemes and other levies that may be applied,\u201d he said.<\/p>\n
\u201cWe may be facing chaos over lack of instruction and clarity.\u201d<\/p>\n
Mr Murray told the committee that there is a \u201cserious insufficiency\u201d in information or detail about the implications of Brexit.<\/p>\n
\u201cThis obviously comes from the lack of clarity at EU and British Government level as to what form of deal may take place, if a deal is completed successfully, or what no deal means in reality at a day-to-day level within business,\u201d he added.<\/p>\n
\u201cFurthermore there is serious evidence of a lack of common understanding of the North of Ireland Protocol as already agreed.<\/p>\n
\u201cBritish Government action in respect to breach of the international agreement has led to a level of further disengagement and mistrust.\u201d<\/p>\n
Patricia King, general secretary of Irish Congress of Trade Unions (Ictu), said she is concerned about the complacency of some businesses that have not prepared for Brexit.<\/p>\n
She told the committee: \u201cLast Friday\u2019s Enterprise Ireland survey revealed that only 42 per cent of businesses believe they\u2019re ready.<\/p>\n
\u201cIt is clear that, while the pandemic is having the greatest impact on employment, Brexit has major consequences for many workers.<\/p>\n
She added that recent Department of Finance estimates warned that a no deal outcome would increase unemployment, causing up to 10,000 job losses.<\/p>\n
This impact would be concentrated in sectors such as agri-food, traditional manufacturing and financial services \u2013 all of which have been \u201crelatively less affected by Covid-19\u201d but which have \u201cstrong regional footprints\u201d, Ms King said.<\/p>\n
Fine Gael TD David Stanton said: \u201cI have been alarmed by this for a long time and I think it\u2019s been obscured by the fog of Covid. This is horrific.<\/p>\n
\u201cA deal would be terrible, a no deal would be absolutely unbearable.\u201d<\/p>\n