Kevin Sherry, executive director at Enterprise Ireland with responsibility for global business development, said Scottish companies would find themselves in a “very difficult situation” if the UK left the trading bloc without a Brexit deal and punishing World Trade Organisation tariffs were applied to exports.
He told The Scotsman: “Brexit or no Brexit, the relationships and trade between Ireland and Scotland are fundamental to companies in both jurisdictions. If there wasn’t a deal and WTO tariffs were applied, that would be a very difficult situation.”
Enterprise Ireland is a government agency that aims to help Irish companies build international trade, and Sherry said exports to the UK total more than €7.5 billion (£6.6bn) a year. Scottish exports to Ireland total more than £1bn.
He added: “Growth of Irish companies’ exports to Scotland is outperforming those to England, growing by 13 per cent last year. Those companies are continuing to embed themselves in Scotland for the long term and increase their employment levels.”
Pointing to the example of Longford-based timber group Glennon Brothers, which acquired Windymains Timber of East Lothian in 2005 and Adam Wilsons and Alexanders Timber Design of Troon in 2008, Sherry said: “They are a significant player in the market and now employ more people in Scotland than they do in Ireland.”
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Sherry said the food and drink sector was “very important” to Ireland, with beef alone accounting for more than €1bn of its exports. The country is the world’s sixth-largest exporter of beef.
He added: “Ireland also imports quite a bit of Scotch whisky and related products, and that’s a good example of trade in both directions.
“The UK is the number one export market for indigenous Irish companies, and bilateral trade between the two is estimated to be in the order of €1bn a week. If any trade barriers were put in place that could impact that, we would not see that as positive.
“From Enterprise Ireland’s perspective, we see the maintenance of as free trade as possible between the two countries as a fundamental factor in terms of being able to continue to grow and develop that bilateral trade. Therefore, we certainly are concerned about any instability or uncertainty and have been working with our client companies to help them prepare for the various scenarios that might emerge under Brexit.”
Emerging fields such as financial technology, or fintech, are also of growing importance, he said, “and we have a strong cohort of companies in that space, particularly in payments”.
Royal Bank of Scotland recently announced a collaboration with Deloitte and a group of Irish banks to explore the use of blockchain technology in an effort to improve payments systems.
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The state-backed lender’s Ulster Bank arm is leading the industry initiative, dubbed Project GreenPay, which will use RBS’s Emerald platform.
Blockchain, a digital system for proving ownership of assets, is predicted to dramatically change industries such as the banking sector.
Technology and innovation experts from RBS, Ulster Bank, AIB, Permanent TSB and Deloitte have been testing the system at the Dogpatch Labs technology hub in Dublin by passing “dummy” payments to each other to test for performance, accuracy and scalability.
Their next step is to run a pilot using live payments and explore further uses of the technology in the international payments and foreign exchange space.
Sherry added: “It is an area that’s of interest and one where there’s potential for strong collaboration between Irish and Scottish companies.”