IRISH ONLINE SHOPPERS will have to pay more when buying from UK retailers post a no-deal Brexit
An updated action plan on the contingency measures being put in place for Ireland if there is a disorderly Brexit outlined a number of sectors that will face disruption, such as airports and ports, taxation, and transport.
In relation to retail, and particularly online shopping, it states that “after Brexit, the UK will not be part of the EU’s Digital Single Market and consumers may not be protected by EU consumer protection legislation”.
Additional import charges, duty and VAT will apply, states the report.
If you are used to buying a number of items online, and later returning them to the UK retailer (free of charge, generally), you may now face additional administrative costs for export and re-import costs for your returns.
“Consumers will therefore have to choose where they place their orders,” states the report.
Buying online
“When the UK leaves the EU, the operating environment for online retail will change, both consumers buying from retailers and site located in the UK and also Irish retailers selling on the UK,” states the government report.
When asked about the additional costs to online shoppers, Tánaiste Simon Coveney said “to be simplistic, what people need to realised is if they are buying products from the United Kingdom after a no-deal Brexit, it is the equivalent from buying from a third country” outside the European Union.
Similar to buying from a jurisdiction like the US, shoppers will be subject to tariffs on their purchases.
“We’ll see a real change in online traffic” for shoppers who regularly buy goods from UK platforms, said Coveney.
The Tánaiste said it makes sense for Ireland and the UK to be “buying and selling” with each other.
“But in a no-deal scenario, the trading relationship will fundamentally change, both online and offline,” he said.
The documents on no-deal planning, which is over 100 pages long, also states that north-south trade would be particularly affected and it could no longer be as frictionless.
Checks on the border?
The big question remains preparations for a border. It is a question political leaders are still avoiding.
“The truth is that we will need to take some action somewhere in our economy to ensure that we are protecting the integrity of the products that are then going to be sold on out of Ireland.”
However, he added:
“We are not going to put checks on the border, or close to it.”
The government document states that there should “no illusion” – an no-deal Brexit will have “far-reaching change on the island of Ireland”.
It adds:
This would particularly impact on North-South trade, which could no longer be as frictionless as it is today. The impact of tariffs, and of the customs and sanitary and phytosanitary (SPS) requirements and associated checks necessary to preserve Ireland’s full participation in the Single Market and Customs Union, would be significant for the operation of the all-island economy and would involve additional costs for disruption to businesses through the island, particularly those in Northern Ireland.
While the document outlines resources, staffing and infrastructure has been ramped up at Irish ports and airports, with over 170 vets and inspectors hired and on the books, there is still no plan for resources that might be needed if border checks are introduced.
Continually pressed on the issue today, the Tánaiste said the Irish government are still in discussions with the EU Commission about how to protect the EU Single Market, so as to ensure Northern Ireland doesn’t become a “backdoor”.
What is under discussion, and has been for a number of weeks now with the European Commission, is how can we in a real and verifiable way, ensure that the integrity of the Single Market is protected and that we don’t have essentially an unprotected back door through Northern Ireland into the EU Single Market.
Coveney said it is “not helpful” for him to speculate about what solutions might be provided as the government is still in talks with the commission.
He said “some progress” had been made in recent weeks, but added: “We’re not where we need to be.”
He ruled out the notion of creating new “zones” in and around the border that could be used for checks, stating:
“If you create zones, you create new borders.”
He said the government’s focus is on resolving the issue, adding:
“They are not easy issues to resolve, that is why they are taking so much time.”
Other areas the report touches on is the lack of Institutions in the North.
“If the Institutions are not in place at the time of a no-deal Brexit, there is a risk that the UK government might initiate to move to Direct Rule in Northern Ireland”.
The report states that planning and infrastructure at Irish ports and airports is near completion, with additional warehousing in place for checks, as well as traffic plans in place for scenarios where trucks are blocking up Dublin Port, for example.
The Tánaiste said he would not “sugar-coat” it for people, stating that a no-deal Brexit will be a “very, very difficult issue for Ireland to deal with”.
It will be an “ugly prospect” for the country and will have “profound” economic implications for Ireland on “all levels”, he said.
How much will all this contingency planning cost?
No cost estimate has been generated yet, but Finance Minister Paschal Donohoe said the costs will considered in the budgetary context in the run up to October.
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