Businesses told to get ready for a ‘hard’ Brexit

A hard Brexit will act as a hammer blow to many businesses and they need to get ready.

Businesses need to recognise the risks that Brexit posses to their operations and take the necessary actions.

The call from Chambers Ireland comes after the seventh round of negotiations between the UK and the EU broke up without an agreement being reached.

“At this late stage, after over four years of British intransigence and improvisation, a no deal Brexit is the most probable outcome. Businesses need to act accordingly”

Chambers Ireland said it is disappointed that a compromise has not been found.

The likelihood is that the UK’s transition period will end without a trade deal being in place.

Hammer blow

Chambers Ireland CEO Ian Talbot warned at the weekend that a hard Brexit will act as a hammer blow to many businesses – both in the UK and Ireland – that are surviving on the margin.

He said that there are now 131 days until the transition ends and businesses must begin to act as if no deal will be forthcoming.

“With each day that passes, the likelihood increases that Britain and the EU will be without a trading agreement come the new year. All the signs suggest that we are heading in that direction.

While the day to day challenges that Covid-19 brings upon businesses make it hard for them to take the long view, it is important that all businesses consider the implications of a hard Brexit when they are developing their strategies to trade through Covid-19 over the next 6-12 months.

“We are no closer to a deal today than we were in January. Neither side has made substantial compromises from their initial positions, the room for manoeuvre is reducing and the Global Economy’s trading environment has suffered the most significant shock ever.

“Businesses, large and small, throughout the island must act as though a deal will not be forthcoming. Businesses need to interrogate their supply chains to ensure that they are not over exposed to the disruption in trade that a no-deal Brexit presents.”

Talbot said that firms that are supplied from, or through, Britain need to source alternative suppliers which can be swiftly introduced into their supply chains in the event of the logistical nightmare that a reversion to WTO rules inevitably presents.

“Those businesses that export to Britain must put in place contingency plans to mitigate the damage that the absence of a trade deal will do to their business, while those that export through Britain need to have conducted trial runs on alternative routes to their markets which will avoid British ports.”

He said there are only 131 days until the transition period ends and Britain’s status as a Third Country becomes a fait accompli.

“At this late stage, after over four years of British intransigence and improvisation, a no deal Brexit is the most probable outcome. Businesses need to act accordingly.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 24 August, 2020