Brexit will disrupt trade flows and intensify competition with the UK for inward investment in Ireland, according to Danny McCoy, CEO of Irish business association Ibec.
McCoy was speaking after a meeting with the EU's chief Brexit negotiator, Michael Barnier. He commented: "We need to keep a close eye on how Brexit will affect the evolution of the EU into the future and the UK's economic model. Both will have a big impact on the external business environment."
"It is vital that the Brexit outcome does not disadvantage Ireland's economic prospects in any way, and in particular, it must not damage the competitiveness of Ireland and the EU in the global race for investment."
McCoy argued that the EU will need to support investment by member states and ensure that countries have the flexibility to compete with the UK post-Brexit, including on tax. He warned that contingency planning must take place at both Irish and EU levels, and that the EU should establish a temporary state aid framework "to offset the worst effects of Brexit on otherwise viable firms."
McCoy said that there will need to be tailored provisions which take into account the trade exposure of key Irish sectors and the potential impact of Brexit on integrated cross-border supply chains between the UK and Ireland.
"We need to focus on mutually beneficial outcomes, which maintain existing strong EU-UK business ties. An ambitious, comprehensive free trade deal is the aim, but fair competition must also underpin any new relationship," he concluded.