European Business: Brexit's Impact on UK-Ireland Trade and Economy

This report examines the economic implications of Brexit on the UK and Ireland's trading relationship, focusing on the negotiation of new commercial policies between the UK and the European Union. The analysis explores various alternatives for the UK, including single market access, free trade agreements, and WTO membership, evaluating their potential benefits and limitations. The report also investigates the specific impact of Brexit on trade between the UK and Ireland, highlighting the vulnerabilities arising from their close economic ties and the effects on key sectors like agri-food. The study underscores the negative consequences of Brexit on trade dynamics, consumer behavior, and legal frameworks, emphasizing the need for diversification and strategic adaptation in the face of changing market conditions. It also provides a detailed account of the current trade relations and the potential future scenarios based on the existing policies and agreements. The report concludes with a comprehensive assessment of the challenges and opportunities that Brexit presents for both the UK and Ireland, offering valuable insights for policymakers and businesses navigating the post-Brexit landscape.

Running head: EUROPEAN BUSINESS
EUROPEAN BUSINESS
Name of the student
Name of the University
Author note

1EUROPEAN BUSINESS
Answer 1:
United Kingdom (UK) is no longer a part of the European Union (EU), which has led
to a new set of commercial policy within the country. After Brexit, it can be seen that UK
needs to be the largest partner in terms of trading within EU so that the economy of the
country can be balanced in a better way (Minford 2016). The major alternative for the
country would be to become the largest and single market in countries like Norway so that it
can stabilize its own economic conditions. Another alternative approach would be to try and
negotiate the bilateral trades with countries like Canada and Switzerland or go in to a trade
agreement with the EU with the help of the World Trade Organization (WTO) (Scalera
2017). The use of any of these options would help the country in maintaining the balance
between its political control and economic integration.
Countries like Norway, Liechtenstein and Iceland follow the policy of single market,
as they all are a part of European Economic Area (EEA), which allows the movement of
people, services and goods freely (Tynes and Haugsdal 2016). The UK needs to evaluate this
alternative as it may allow them in becoming a member of the EEA and follow the guidelines
laid by EU with respect to competition, employment, environment and protection of the
consumers.
The other option is to go in to an agreement for free trade within EU, which will help
the country to be economically stable. The use of free trade agreement (FTA) would help in
removing the taxes that are present on the trade that takes place between the EU and UK
(Belke and Gros 2017). The limitation of this alternative is that the access in the market by
the country is limited as compared to single market policy as it will allow them in gaining
control over the entire market of another country. The use of FTA however will restrict the
movement of free labour within the EU except Switzerland.

2EUROPEAN BUSINESS
The last option for the UK would be to go in to a trade agreement with the help of
WTO by becoming its member. As a member country, it will enjoy the benefits such as the
exports that are being done by the country to EU will be imported at a different rate, which
will result in increasing the cost of importing (Dhingra et al. 2017). This will in turn result in
higher revenue of the exporting country that id UK in this case. However, WTO restricts the
movement of free labour but mobility of capital will be present not only in EU but with
countries that are not part of EU as well.
Answer 2:
The UK plays a major role in terms of trade and investment with Ireland and the issue
of Brexit has resulted in a negative way on the country as well (Hunt, A. and Wheeler, B.,
2017). As per the report published in 2015, it was seen that Ireland imported goods worth €31
billion from the UK and was responsible for supporting more than 80,000 jobs as well
(Irishtimes.com 2019). With the onset of Brexit, it can be seen that the exposure enjoyed by
the UK in exporting goods to the Irish Republic has halved and is majorly taken over by
countries like Germany and France. The high level of trade between Ireland and the UK
makes them more vulnerable post-Brexit, as the country needs to diversify in terms of trade.
Brexit has a negative effect on the trade relation between the UK and Ireland as the
country comprises of islands, where the shopping and transportation patterns are closely knit
within the value chain (Bell 2016). The taste of the consumers with respect to goods and
services between UK and Ireland is almost the same as both the markets offer the same range
of products to the consumers. The legal system in both the countries with respect to trade is
same where more emphasis is given on the consumers. There is also close association
between the markets of the two countries which has felt a negative effect due to the impact of

3EUROPEAN BUSINESS
Brexit. Both the countries have various commercial contracts, which has got largely affected
due to the issue of Brexit.
One of the major sectors that has been affected negatively due to Brexit in Ireland is
the agri-food sector, as almost 40% of the exports are directly linked with the UK. This has
also affected the sub-sectors of agri-food business where the rate of unemployment has gone
up to a large extent (Swinbank 2017). Thus, it can be stated that Brexit has had a negative
impact on the trade relationship between the UK and the Ireland, as the market is heavily
dependent on the UK imports for its goods and services.

4EUROPEAN BUSINESS
References
Belke, A. and Gros, D., 2017. The economic impact of Brexit: Evidence from modelling free
trade agreements. Atlantic Economic Journal, 45(3), pp.317-331.
Bell, C., 2016. Brexit, Northern Ireland and British-Irish Relations. European Futures, 26.
Dhingra, S., Huang, H., Ottaviano, G., Paulo Pessoa, J., Sampson, T. and Van Reenen, J.,
2017. The costs and benefits of leaving the EU: trade effects. Economic Policy, 32(92),
pp.651-705.
Hunt, A. and Wheeler, B., 2017. Brexit: All you need to know about the UK leaving the
EU. BBC News, 25.
Irishtimes.com (2019). Irish goods exports to Britain fall 4% amid Brexit uncertainty.
[online] The Irish Times. Available at: https://www.irishtimes.com/business/economy/irish-
goods-exports-to-britain-fall-4-amid-brexit-uncertainty-1.3758717 [Accessed 6 Oct. 2019].
Minford, P., 2016. Brexit and trade: what are the options?. The economy after brexit, pp.13-
15.
Scalera, J.E., 2017. Negotiating Membership in the WTO and EU. Routledge.
Swinbank, A., 2017. World trade rules and the policy options for British agriculture post-
Brexit. Briefing paper, 7, p.12.
Tynes, D.S. and Haugsdal, E.L., 2016. In, out or in-between? The UK as a contracting party
to the Agreement on the European Economic Area. European law review, (5), pp.753-765.