Brexit business relocation will be a two-way street
It is expected that the triggering of Article 50 in coming weeks will also set relocation plans in motion as companies seek to secure access to their main markets. The focus is very much on UK financial services which will lose their ‘passporting rights’ whereby authorisation in one EU country gives access to all. IDA Ireland expects major companies to announce their relocation plans “in the next number of weeks” rather than wait for the outcome of EU-UK negotiations. CE Barclays Bank and Morgan Stanley are known to be scouting for premises in Dublin.
Some commentators believe that EU financial services have been over-reliant on the City of London for growth and even for development of regulation. Bruegel.org reckons the time is right for greater integration of EU capital markets.
The biggest Irish relocation story to date was about Almac of Craigavon, which announced on 26th January that it would start manufacturing in IDA premises in Dundalk. However, it would be dangerous to assume that the news to date represents the full relocation pattern into the future.
Companies seeking to secure access to the EU market in general will, almost by definition, tend to be larger. As yet we know pretty much nothing about any plans of Irish companies dependent on access to the UK market, which may mean sending a weekly van-load from Letterkenny to Derry, or several trucks out of Dublin Port to English population centres.
On average, they are much more likely to be SMEs which have never made it into any continental market: that is how most of our SMEs grow, into the UK only.
It would take years for a small company with a heavy dependence on the UK to diversify into other EU markets, and the task would simply be beyond many of them. They will have no choice but to secure access to their British customers by whatever means necessary. Logic suggests relocation of some production to England.