The first six months matter – and the world is watching
THE the UK and remaining EU 27 prepare to sit down at the negotiating table, businesses across Northern Ireland will be looking for real signs of momentum early on.
And making sure the talks get off to a good start will be vital to securing a deal that delivers for both sides. For make no mistake, the next six months are crucial for the country's future prosperity – which is why the Northern Ireland's business voice must be heard.
CBI research has highlighted the dangers of a ‘no deal' scenario, which would open up a Pandora's Box of economic consequences. Some companies are getting ready, but other won't prepare because they're hoping for a deal. But in reality many firms can't prepare because the cost of change is simply too high to consider. Businesses therefore want to see some ‘early wins' that will help them and their customers maintain the confidence that has helped the UK economy confound expectations since the EU Referendum outcome.
Firstly, notification of Article 50 removes the barrier to a mutually beneficial agreement that will allow millions of people across Europe – and their families – to breathe a sigh of relief. This should happen within weeks, not months. There can be no more excuses – EU citizens here and UK people overseas deserve certainty about their future.
Secondly, the discussion of new trading arrangements with the EU must go hand-in-hand with negotiating the terms of the UK's exit. Waiting for the ‘divorce' to be agreed first will push trade negotiations into the long grass. Let's remember that any deal the UK and EU negotiate will do more than set tariffs and quotas. It will set the framework for our relationship for decades to come.
Northern Ireland businesses are 100 per cent committed to making a success of this economy regardless of the challenges ahead; but they will require a smooth transition to new arrangements with our largest trading partner, the EU. Local companies – and investors – need to know what happens the day after.
From finance to pharmaceuticals, there are many shared interests between businesses on both sides of the Channel that need to be untangled and reset. Acknowledging this early on will help contribute to a constructive negotiating environment where tougher questions can be addressed.
Since the turn of the year, my colleagues at the CBI have met political representatives from 17 of the 27 member states, including senior ministers from Germany, France, Hungary, Belgium, Luxembourg, and Malta.
We've also met our sister business federations from every other EU country, many of whom are still shocked, and waiting to see further details of the UK's negotiating position before assessing what it means for them.
Leaving, as some have advocated, without a deal would see businesses in Northern Ireland and across the UK facing tariffs on 90 per cent of its EU exports by value amid a raft of new regulatory hurdles. This would lead to lower investment, with knock on effects on our already low levels of productivity and wages and would result in fewer jobs.
Let's look at for example at Northern Ireland's local agri food sector. CBI members in some of our largest dairy companies tell me that their business would be wiped out overnight if the UK resorts to World Trade Organisation (WTO) rules.
Now consider supply chains relating to the local manufacturing sector, plus the complexity of our financial services sector which has relied for decades on the ability to do business in other member states purely on the basis of their home state authorisation. When we start to look at the sheer complexity of what is ahead, you can see just how difficult it would be for local firms to focus on creating jobs and designing long-term growth strategies when the future environment is so uncertain.
That investors and consumers alike have maintained their optimism since the Referendum is a welcome reminder of the inherent resilience of the UK's economy. But we mustn't be complacent.
In Northern Ireland we need a devolved government that focuses on making our voice and our unique circumstances heard during these uncertain times. We need a government that creates the right conditions for local businesses to thrive and create jobs for our young people. A focus on education, productivity and raising local living standards must be top of our economic agenda. Ultimately, we need a shared government that truly represents the interests of all citizens across Northern Ireland
Politicians seem to forget that businesses make operating decisions years in advance, whether opening a new factory or partnering with a college to build skills and talent. Therefore absolute clarity on the UK's future trading relationships with the EU is needed as soon as possible. The next six months will be crucial.
:: Angela McGowan is regional director of CBI NI. Follow her on Twitter @angela_mcgowan