The Freight Transport Association (FTA), the business organisation which represents the logistics industry, is urging British MPs to rule out the option of a No Deal Brexit when they vote in Westminster in two weeks’ time, after official research showed that a No Deal outcome would have a disastrous impact on Northern Ireland’s services trade, and logistics in particular.
The research, conducted by the Department for the Economy, found that a No Deal outcome would significantly reduce the ability of NI firms to access service markets in the EU and would impose greater costs via tariffs which would have to be borne by the sectors concerned. According to the data published by the department, several sectors within the logistics industry would see significant baseline cost increases: courier services (35%), air transport (34%), road freight transport (17%), storage and warehousing (14%) and distribution services (15%) from baseline ad valorem equivalents (AVE) figures. Seamus Leheny, Policy Manager at FTA explains why could have a severe impact on the Northern Ireland economy in the future:
“We all know that the NI economy has a much more dependent relationship with the Republic and the rest of the EU than other parts of the UK, and the new data throws up some chilling warnings about the threat that a No Deal poses to our economy. At FTA we have been warning of the perils of a No Deal departure from the EU since Article 50 was triggered, and it is now time for our elected representatives to remove that option for the sake of NI’s future business prosperity and continued trading success.”
According to the Department for the Economy’s Summary of the research, entitled “EU Exit Impacts on Northern Ireland’s Services Trade”, leaving the EU will have more significant impacts on the Northern Ireland economy than other parts of the UK, as Leheny explains: “Approximately 38% of NI’s service exports were sent to Ireland in 2016 and this number has climbed steadily since. Our trading relationship with Ireland and the rest of the EU is an essential part of our continued economic success, and changing the policies that govern this relationship will have a more significant effect on us than on the mainland as a whole. What the logistics industry – which has six areas identified by the research as under threat of constriction – needs is a deal which allows the continued free movement of goods and services to and from the EU with as little friction as possible.
“A No Deal departure from the EU would leave NI’s businesses stranded, with no time to learn new processes or adopt new trading practices. We only have two weeks to go until the UK’s scheduled departure from the EU and logistics businesses are now facing very real threats to their livelihoods, with no certainty on their ability to move goods and services to customers on time and on budget, without delays or additional charges being incurred. This government research is a stark warning to our MPs that a No Deal simply won’t work for NI – logistics businesses want to keep NI trading, but need the tools and access to be able to do this. And time is running out.”
The research, EU Exit and Impacts on Northern Ireland’s Services Trade, can be viewed here https://www.economy-ni.gov.uk/publications/eu-exit-and-impacts-northern-irelands-services-trade