Paschal Donohoe, the Minister for Finance, Public Expenditure, and Reform, has said that the agri-food sector, along with the indigenous manufacturing sector, would be the most adversely effected areas of the economy after a no-deal Brexit.
The minister was commenting after his department outlined its initial assessment of the economic and fiscal impacts of a no-deal Brexit, which concluded that: “All forms of a UK exit will have a detrimental impact on the Irish economy, with the most adverse impacts likely to be felt in agri-food and indigenous manufacturing sectors.”
Donohoe pointed out that the labour-intensive nature of agriculture will be partially to blame for the economic hit to the sector.
The level of economic activity will be around 4.5% lower than our existing trajectory over the medium-term. This aggregate figure hides an even larger hit to economic activity in labour-intensive sectors such as agri-food and indigenous small and medium-sized enterprises.
Donohoe’s comments came while the Irish Farmers’ Association (IFA) was discussing the same issue at its Annual General Meeting (AGM) in Dublin today, January 29.
“In a process characterised by uncertainty, the one certainty is that a no-deal would be a catastrophe for Irish farming,” warned the association’s president, Joe Healy.
Healy also called on the UK government to adjust its “red lines”, and stressed that the backstop arrangement, to avoid a hard border between Northern Ireland and the Republic of Ireland, has to remain in place.
The Prime Minister, Theresa May, has said that she intends to return to the European Union to explore the possibility of altering the withdrawal agreement – which was negotiated between Brussels and London, but which was rejected overwhelmingly by members of parliament (MPs), including many in May’s own party.
Those MPs who oppose the deal are hoping that the EU will drop the backstop as part of its deal; however, European officials have repeatedly said the deal will not be renegotiated.