Cantillon: Irish businesses now face tricky reality of Brexit

The markets may have settled for a bit, but the tricky reality of Brexit is starting to hit Irish businesses. The clear message from the EU council to Britain is that if you want access to the EU single market, then you have to sign up to the consequences, which include free movement of people, compliance with EU rules and a budget contribution.

This is a long game, of course, and a multitude of possible scenarios are being sketched out. There could be a deal which gives Britain some ground on immigration and allows single market access. But the early noises from both sides give cause for caution. Britain cannot have "a la carte" access to the single market, EU council president Donald Tusk warned on Wednesday. Britain, meanwhile, seems to have no clue what it wants.

For Ireland, British access to the single market would be the ideal outcome, short of the whole Brexit idea being abandoned. It would guarantee our exporters access to the UK market and visa versa, avoid disruption to supply chains and potentially make issues like such as the Border easier to deal with.This would mean an agreement on a relationship similar to that between the EU and Norway. This is what Ireland will push for.

If this does not prove possible, it gets a lot muddier. A PwC report on Brexit looks at a range of trade relationships between the EU and countries such as Canada, Turkey and Switzerland. All are more complicated than the Norwegian model and involve complicated deals differing from sector to sector – and tariffs and trade restrictions which would cost.

If no deal is possible – and don't rule this out – then World Trade Organisation rules would apply and there would certainly be tariffs and a whole host of impediments to trade.

The trouble with trade is that if you start getting into the detail, it takes years to negotiate, and with 27 on the EU side it would be really difficult. The only way a deal will be done within a short period of years is if there is an overarching decision to let Britain retain access to the single market, removing the need to negotiate all the detail. This would require an awful lot of “give” on both sides.