Businesses Thrive Through All-Island Cross-Border Trade, Despite Challenges

In the post-Brexit landscape, businesses in Northern Ireland are embracing all-island trade incentives. A leading tax expert, Alan Gourley from Grant Thornton in Belfast, has highlighted how companies have opened operations in the Republic of Ireland to capitalize on its lower corporation tax rate.

The Expansion of Northern Irish Businesses into the Republic

“We have seen several Northern Irish companies expand their cross-border activities, establishing branches and full-fledged companies in the Republic,” Gourley explained. “This trend has been driven by the desire to benefit from the Republic’s tax environment.”

Interestingly, the cross-border movement of businesses is not one-sided. Companies from both regions are recognizing the importance of operating on an all-island basis, fostering seamless trade and investment opportunities.

The Limitations of the Windsor Framework

Despite these efforts, Gourley noted that no Northern Irish business has reported a surge in activity attributed to the Windsor Framework. This arrangement, which retains Northern Ireland’s place in the EU single market for goods, has been beneficial as a mitigation measure but falls short due to its exclusion of services.

Further complications arise with British-based companies less inclined to trade with Northern Ireland, citing the bureaucratic challenges posed by the Windsor Framework.

Adapting to New Realities

Gourley advised businesses in Northern Ireland to transition toward understanding and managing customs paperwork. One example he cited was a client successfully shifting suppliers from Leeds to Cork and France, thereby enhancing their business.

The Value of Comprehensive Economic Research

The launch of a major four-year macroeconomic study on Northern Ireland and the broader all-island economy underscores the importance of understanding policy impacts. This research, conducted by the Economic and Social Research Institute (ESRI) and the National Institute of Economic and Social Research (NIESR), will provide critical insights moving forward.

Alan Barrett, CEO of ESRI, emphasized the study’s potential in offering valuable guidance on future policy changes and their effects on the Northern Irish economy.

Data Disparities and Policy Implications

Adele Bergin, a researcher, highlighted how differences in data collection between the Office of National Statistics and the Central Statistics Office impact the analysis of policy changes on Northern Ireland.

Traditionally, Northern Ireland’s economy has relied more on public services and is less sensitive to economic cycles. However, this also means that it misses out on gains experienced in other parts of the UK.

The Weight of National Policy Changes

Businesses across the UK have expressed concerns about rising national insurance contributions and living wage increases. Gourley’s clients argue that these changes will hit Northern Ireland particularly hard, given its higher share of manufacturing workers.

The Unique Challenges of the Northern Irish Economy

Angela McGowan, director of the Confederation of British Industry in Northern Ireland, posited that the regional economy faces unique challenges, including a more rapidly aging population and reduced immigration compared to other UK areas.

The Role of Research in Economic Decision-Making

Danny McCoy, director general of the Irish Business and Employers Confederation (Ibec), stressed the importance of this research in establishing a consistent baseline for evaluating policies. Nevertheless, he clarified that such studies should not be interpreted as endorsements or critiques of potential unification scenarios.

Conclusion

The evolving economic relationship between Northern Ireland and the Republic of Ireland signals significant changes and opportunities. As businesses adapt to a new landscape fraught with challenges and benefits, comprehensive research and informed decision-making will be crucial in shaping the region’s future.

Stay informed, engaged, and share your thoughts on how cross-border trade can continue to thrive despite the complexities brought about by Brexit. Your insights are invaluable.