Frequently Asked Questions for Irish Exporters

FAQs

Q.1  I am an exporter to the UK. With reference to the referendum result on EU membership, what do I need to do next?

  • The key immediate challenge for you is likely to be potential volatility over the short-term in the value of sterling. If you have not already done so, you need to get expert advice on your foreign exchange (forex) strategy for hedging and risk management. There is a list of key financial institution contact details on our website. Enterprise Ireland has put together a new cross agency team including our UK market team to provide support to Enterprise Ireland clients impacted by a decision to leave the EU.  We have a dedicated email address UKExportHelp@enterprise-ireland.comThere is also an Enterprise Ireland helpline +353 1 727 2727 available which opened on Friday 24th, 2016 at 11am – 5pm.
  • There will be no changes to trade agreements for at least two years. During that time, Enterprise Ireland will work with client companies to help them re-evaluate their business plans, diversify into new markets, improve operational efficiencies and build new business relationships globally. We can also provide some international funding supports for client companies seeking to diversity into new markets. We have further details on our website and if you are impacted, please contact your Development Advisor about your strategy.
  • Enterprise Ireland is running an information campaign for clients including practical guides, online information and webinars. Our UK office will also be publishing an updated UK market access guide which will provide guidance on issues including: the post-Brexit implications of trading with the UK, reducing supply chain costs, accessing funding, finance, foreign exchange, employment regulations and legal issues. Further details of the seminar/webinar will be on our website shortly.
  • Enterprise Ireland will also host an International Markets week in the first week of October to provide Irish exporters with access to its global in-market teams. Clients are advised to avail of this and other opportunities. If you would like to attend, please contact your Development Advisor.

Q.2  What should I do next?

  • If you have not already done so, you should communicate with your clients and suppliers as soon as possible. Emphasise that there will be no changes to trade agreements for a minimum of two years. Reassure them that you are putting in place a strategy to deal with post-Brexit implications as they relate to your business relationship.
  • You should also review your client and supplier contract positions in the UK and evaluate the possible impact of currency volatility with your financial advisor or bank.
  • Over the next two years, there will be a level of uncertainty while the terms of the Brexit are worked out. You should consider a medium-term strategy of market diversification. Enterprise Ireland will work with you to identify new markets and win new business through our international network of 32 offices around the world and team of experts at home. You can contact your Development Advisor to discuss your company’s medium term strategy.
  • You will need to re-evaluate your business strategy in the UK for the medium term. Enterprise Ireland can support you through our range of programmes in business strategy, management development, international sales and competitiveness.

Q.3  What are the costs to my business likely to be?

  • In the short-term, the potential likely cost will be largely around currency exchange rate changes.  This could potentially make Irish exports less competitive.
  • In the medium to longer term, subject to what is decided, it is likely that costs for Irish exporters to the UK could potentially increase. The additional costs of complying with rules-of-origin checks, import licences and other documentation requirements would raise the cost of trade between the UK and the EU. The larger the regulatory differences between the EU and UK become, the larger these non-tariff costs might be.
  • Non-tariff barriers such as customs controls could be reintroduced and specific tariffs could be levied.
  • You should review your business strategy and consider that there could be cost increases in relation to:
    • Tariffs and Levies
    • Border control
    • Customs
    • Regulation
    • Distribution
    • Energy Costs
    • Company Law
    • Transport
    • Recruitment
    • Tax

Q.4  I export to the UK and have a staffed office there, what do I need to consider?

There may be impacts regarding movement of labour pending negotiation between the EU and UK in which the nationality of your staff may become relevant. You should review this situation in preparation for any changes that may arise from the new relationship between the EU and UK.

Q.5  I am in the agri-business, will demand for my product from the UK dry up?

  • A reduction in the value of sterling will most likely impact on you which could affect margins in the short term. The level of impact will really depend on your existing business capabilities and also the movement in sterling. A loss in the value of sterling could potentially make your product more expensive.
  • In the medium term, trade negotiations may have a larger impact on the agricultural sector given its size in the Irish market. Though the UK market may be impacted, there are many other markets such as Netherlands, Belgium which may offer alternative business opportunities.
  • That said, Teagasc recently published a report suggesting that demand for Irish food will continue due to the demand from the UK for food imports.

Q.6 What is Enterprise Ireland doing to help Irish exporters now the UK has voted to leave the EU?

In the first instance, Enterprise Ireland has put together a new cross agency team including our UK market team to provide support to clients impacted.

Enterprise Ireland Supports

  1. Information and Guidance: Enterprise Ireland will run an information campaign including: practical guides, online information and webinars, an updated UK market access guide and regional seminars in Ireland and the UK. These will provide guidance on issues including: the implications of trading with the UK, improving competitiveness, reducing supply chain costs, accessing funding, finance, foreign exchange, employment regulations and legal issues.
  2. Market Diversification Support: Enterprise Ireland will intensify its strategy of supporting clients to diversify into new markets. As part of this strategy, Enterprise Ireland will provide increased internationalisation supports to assist client companies to evaluate new market opportunities. It will also intensify its International Trade Mission schedule for the rest of 2016 to include trade missions to Northern Europe, USA, China, India and other high growth markets. Enterprise Ireland will also host an International Markets week in the first week of October in Ireland, to provide Irish exporters with access to its overseas market advisors.
  3. International Sector Clustering Strategy: Enterprise Ireland will expand its focus  on promoting Irish sectoral cluster capabilities to international buyers in growth markets including Northern Europe, USA and Asia Pacific in key sectors such as construction, manufacturing, financial services, software, innovation, BPO and food. There will also be sectorally-focused buyer engagements in Ireland and in-market in the coming months to connect Enterprise Ireland clients to growth opportunities.
  4. UK Market Support: Enterprise Ireland's UK team, based in London, will provide support to clients to help identify key business opportunities in the short and medium terms. They will also provide advice and support on responding to the implications such as improving competitiveness and reducing supply chain costs.
  5. Competitiveness and Market Development supports: Enterprise Ireland will intensify its work with clients exporting to the UK by providing support to improve their competitiveness in the market through its management capability and development programmes.

Q.7  What is the level of trade between Ireland and the UK? How concerned are you that it will fall substantially if the UK leaves the EU?

Trade flows between Ireland and the UK are approximately €1-1.2bn per week. There have been various estimates of the potential fall-off in trade. But the fact remains that the UK will continue to be a key market for Irish companies. Enterprise Ireland is already taking steps to support Irish exporters to the UK consolidate their position and find new customers.

Q.8  What would you say to those who suggest that Irish-British trade isn’t quite what the numbers suggest?

We can’t speak for all trade between the UK and Ireland but last year Enterprise Ireland client companies exported €7.5bn of exports to the UK, up 12% on 2014.

Q.9  When will new trade arrangements come into effect following a UK departure from the EU?

There will be at least a minimum two-year period of negotiation before any changes are introduced, per Article 50 of the Lisbon Treaty.

Q.10  Can Ireland have a trade agreement with the UK on its own?

As an EU member, Ireland cannot negotiate a bilateral trade agreement with the UK. 

Q.11  What is likely to happen in terms of trade with the UK?

The terms of any trade agreements will be negotiated over a minimum two-year period and therefore businesses will continue to trade over that period.

Q.12  What sort of tariffs could be imposed?

It is too early to tell and this will be the subject of negotiation.

Q.13 Who can I contact regarding foreign exchange queries?

The following are the main contact details to assist with foreign exchange queries:

 

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