When 17.4 million citizens of the United Kingdom (UK) voted in favor of Brexit in a June 2016 referendum, few people could predict what would ensue. Not surprisingly, a great deal of speculation began regarding the pros and cons of Brexit.
The situation with Ireland (meaning the island that encompasses Northern Ireland and the Republic of Ireland) has been dramatically affected by Brexit. The pros and cons of the Brexit deal for Ireland are different from those in other countries.
Keep reading to learn more about this intriguing and ongoing situation in the UK and the Republic of Ireland.
What Is Brexit?
Quite simply, Brexit refers to the UK voting to leave the European Union (EU) in June 2016. The UK joined the EU in 1973. Brexit will bring on much change and disruption. That affects Britain and the many other countries by its departure.
The EU is an economic and political union comprising 27 countries. It allows free trade, whereby goods can be transported among member countries without border checks or tariffs. The agreement allows people to travel from country to country within the EU and live and work where they choose.
Brexit is currently in an 11-month transition period set to become permanent on December 31, 2020. The pressure is on for all involved. With Brexit, the pros and cons of leaving the EU are mind-boggling!
The UK has been a critical player in international trade. Becoming a significant trade partner for countries like the U.S., China, Russia, and India. Brexit is sure to have short and long-term impacts on a global scale.
The country most caught up in the dilemmas created by Brexit is Northern Ireland. They are part of the UK. Like Wales and Scotland. Even though it occupies 16.75% of the Island of Ireland, with the Republic of Ireland taking up the rest.
Northern Ireland and Brexit
Today, Northern Ireland, with its population of 1.9 million, is formally part of the UK, like Wales and Scotland. With Brexit, though, this status is in limbo. On the one hand, the Northern Irish need both political and economic support from London.
On the other hand, Brexit (for which many in Northern Ireland voted) worry about the UK’s future and be cut off economically from the EU. They also worry about the possible return of what once was a heavily secured border with the Republic of Ireland.
While many Northern Irish people want to remain part of the UK, others wish for sovereignty or unification with the Republic of Ireland. But could this small country survive on its own? Would the Republic of Ireland be able to match the resources the UK has always provided?
Like other foreign relations issues, decisions about Northern Ireland’s role in international trade fall to London and include trade with the EU and the UK.
Ironically, Northern Ireland is set to keep following the EU’s customs regulations, despite its departure from the EU’s politics. Any goods making their way to or from the UK via Northern Ireland will require border checks, though the way to implement them in one’s own territory is still unclear.
What is clear, though, is the awkward position this creates for London. Northern Ireland’s Unionist parties, especially those supported by the UK’s Conservative Party, are concerned about becoming more distant from it.
They also worry about the possibility of Irish unification.
For their part, Northern Ireland’s business community is concerned about the border checks—not to mention potential tariffs—damaging their ability to compete. Like many people, they are trying to determine which future direction to advocate.
Summary of Northern Ireland’s Position and Challenges
The following represents what is in Northern Ireland’s favor:
- A greatly diminished sectarianism from what existed a century ago during The Troubles
- The Good Friday agreement
- Increased trading opportunities and partners through the European Union
- A definitive separation from its long-time colonizer
The following represents what is not in Northern Ireland’s favor:
- Recent economic growth in the Republic might not be sustainable with both COVID-19 and the loss of its primary trading partner, the UK (with or without Northern Ireland)
- Losing the UK’s generous financial subsidies
- A potential situation that might reignite The Troubles due to increased border surveillance, an identity crisis, or both
- Losing free healthcare from the UK’s National Health Service
Now, let’s consider where and how the UK’s neighbor and continuing EU member, the Republic of Ireland, is affected by Brexit.
The Republic of Ireland and Brexit
In the past century, since the Irish War of Independence, the Republic of Ireland has undergone both economic and political struggles. Some people even described 20th-Century Ireland as “a third world country.”
In recent decades, though, Ireland has made remarkable economic and political progress by offering a tax incentive (12.5% corporation tax rate on active business income) for international corporations to locate here. What a difference this has made!
The country has also put significant efforts into upgrading what was, not long ago, a tragically outdated and Catholic Church-dominated healthcare infrastructure. These initiatives were part of a broader but more subtle attempt to redefine the archaic roles of church and state in the country.
Irish health insurance is not free, as it is in the UK, and it is a mix of public and private coverage. Still, it costs far less than U.S. health insurance.
Speaking of healthcare coverage: It shouldn’t be surprising that the Republic of Ireland concerns the fate of Northern Ireland once Brexit becomes permanent. It would come as a blow to that country’s citizens if they had to switch from British to Irish coverage.
Ireland has been part of the EU and hopes to remain there. Dublin is hoping the UK will work out an EU trade agreement that benefits their country by keeping a relationship with London. It has been cultivating since gaining independence—maybe longer than that.
But what if that relationship doesn’t continue?
The question for Ireland then would be threefold: whether to form even closer ties with the EU, reunite with Northern Ireland (if that country were to secede from the UK), or join the UK as an entire island—which would mean leaving the EU.
Summary of the Republic of Ireland’s Position and Challenges
The following represents what is in the Republic of Ireland’s favor:
- Having won and proven its independence from the UK
- Having a large and diverse population
- A thriving 21st-Century economy that has been fueled mainly by technology, pharmaceutical, and other lucrative businesses that have set up shop in Ireland
- A broad consensus that there should never again be a hard border between Ireland and the UK (i.e., in Northern Ireland)
- That the real challenge of the border involves the movement of goods, not people
The following represents what is not in the Republic of Ireland’s favor:
- The possibility of the UK pulling out from its beneficial trade relationship with the UK
- The possibility of having to integrate all of Northern Ireland’s citizens into its economy and social structures
- The ever-present threat of COVID-19 and how it is putting the onshore pharmaceutical industry at risk
At this point, we believe it’s worth looking at our own Irish business: pharmaceuticals. In a way, we’re on the front lines of two battles—Brexit and COVID-19. Who knows what will come next!
How Will Brexit Affect Irish Pharma?
According to the Pharmaceutical Society of Ireland (PSI), Brexit “will have consequences for people holding a qualification obtained in Great Britain or Northern Ireland and desire recognition of their qualification here in the Republic of Ireland.
In February 2020, shortly after the start of the Brexit trial period, The Irish Times described how the country’s strong pharmaceutical industry would join technology corporations like Apple, Google, and Microsoft in moving the economy forward.
Then the pandemic hit, making Brexit a double-edged threat. Much of “Big Pharma” in the U.S. races to the COVID-19 vaccination finish line. You might think Irish pharmaceutical companies would find opportunities in other markets.
But without a UK-EU trade agreement in place and the Brexit deadline in the offing, it is hard to access either market. Meanwhile, the pandemic hurts Ireland’s ability to keep employees at optimum performance and pursue professional development.
As the U.S. pushes forward with its COVID vaccine trials, our drug companies remain in the background, trying to maintain business as usual by keeping up the supply of everyday medications.
The Pros and Cons of Brexit — Simplified?
It’s hard to distill the pros and cons of Brexit for Ireland since these vary depending on the context you’re considering. For example, will Brexit benefit the Irish pharmaceutical industry by encouraging drug companies to pursue new markets?
Or does Brexit potentially harm this industry (and others) by making it harder to do business with the UK?
And what will the political, economic, and geographical configuration of the British Isles even look like in a few years? There is no doubt that it will have changed. But how? And, due to what prevailing factors? Only time will tell.
In the meantime, If you want to learn more about Irish pharma, keep reading our blog. We post new and informative articles all the time.