The countdown is on to the next meeting of the European Council scheduled for 29 June 2018 with progressions on Brexit high on the agenda. However, this week our Taoiseach Leo Varadkar has, yet again, made his growing concerns clear, calling for substantial progress before the June meeting if any agreement will be reached by the October deadline.
With the political trade deal still very much out of grasp and Theresa May admitting the withdrawal bill could stall until autumn, Irish businesses need to future-proof their organisations and operate on the assumption that a trade deal will not be made.
However, the cloud of uncertainty cast by Brexit is not all grey. Silver-linings have emerged over the past few months. Most recently, the Thomson Reuters group have confirmed it is set to move its $300 billion dollar-a-day foreign exchange facility to Dublin from London. The group will transfer all existing client relationships, as well as fixed income call-outs and auctions, to its new Irish legal entity ahead of the Brexit date.
Martin Shanahan, CEO of the IDA Ireland said, “Thomson Reuters’ choice of Ireland is very significant in terms of our ability to attract top international brands that have influence and reach. This provides IDA Ireland with another powerful calling card for new types of business within international financial services and points to Ireland’s attractiveness to international financial services business. Ireland has the right mix of regulation, skills, experience and office space to make us a very logical place for financial services to locate."
Thomson Reuters are following in the footsteps of Bank of America, who have confirmed plans on moving its EU headquarters from London to Dublin between July and December this year. The move results in up to 125 British jobs relocating to Ireland ahead of Britain’s exit from the EU.
Not only as a country are we winning the spoils of Brexit from a domestic perspective, it is positive to see that indigenous Irish businesses are being pro-active in trying to source alternative markets as a defence against Brexit. For Ireland, it is the agri-food sector that will be hit the hardest by Brexit. The news this week of a €50 million, three-year deal between the Irish ABP group and Asian restaurant chain Wowprime Corporation, demonstrates how Irish businesses are expanding their global footprint and diversifying their trade portfolios as an effective hedge against the Brexit. This deal is followed by an equally impressive and lucrative deal for the Kepak Group into the Chinese market.
Ireland's competitive advantage
However, while these stories are positive, we need to remain vigilant. Apple's recent decision not to proceed with an €850 million data centre in Athenry over delays in planning highlights our need to continually improve our competitiveness and responsiveness.
With Budget season approaching, it is important the Government introduces the correct measures to further prepare Ireland’s economy for the significant challenges arising in the context of Brexit. Retaining a competitive advantage in attracting inward investment is more important than ever and Ireland's pro-business environment must be emphasised in the coming months as Brexit uncertainty remains.
This article first appeared on charteredaccountants.ie May 2018.
Mollie O'Donnell is a Tax Manager in Mazars. You can contact Mollie at email@example.com