Ireland breathes sigh of relief as 'least bad' Brexit deal clinched

DUBLIN (Reuters) - Irish Prime Minister Micheál Martin expressed relief on Thursday after neighboring Britain reached a last-minute trade deal with the European Union that he believed was the "least bad version of Brexit".
Ireland, the EU member state most exposed to the aftermath of Britain's departure, was a key player during the four years of exit negotiations as it tried to protect its highly exposed agricultural sector and avoid a harsh border infrastructure with the UK region Northern Ireland.
"There is no such thing as a good Brexit for Ireland, but ... I believe the agreement reached today is the least bad version of Brexit that can be made in the current circumstances," Martin said after the UK and EU announced the deal .
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While Irish firms have diversified into new markets since 2016, reducing trade to the UK to 9% of total Irish goods exports last year, the closest neighbor still accounts for around a third of its food and agricultural exports.
This sector would have been hit by high tariffs had the UK left the EU on World Trade Organization terms. Ireland's large beef industry, which sells almost half of its production to the UK, would have levied tariffs of 72%.
Maintaining the delicate peace in Northern Ireland without giving the UK a back door to the EU single market across the 310 mile British-Irish land border was one of the toughest issues in the first phase of talks, which culminated in the withdrawal agreement in late 2019.
The UK government angered the Irish government by threatening to unilaterally remove elements of this deal, but withdrew the threat when the outlines of a trade deal emerged in recent weeks.
"The peace process has been protected, the peace financing has been protected, Ireland's place in the EU internal market has been protected," Irish Foreign Minister Simon Coveney told RTE Radio.
While Ireland's large pharmaceutical and multinational tech sector has protected the economy from the worst of the COVID-19 crisis, around 20% of its workforce is currently permanently or temporarily unemployed. In other words, what Martin said could not have been afforded, it could have been a second "appalling" economic shock resulting from a "no-deal" British exit from the EU.
Ireland based its budget for 2021 on the assumption that talks would fail. A deal could raise the finance department's gross domestic product forecast for the next year by 3-4 percentage points, from + 1.7% to -2.1%, Finance Minister Paschal Donohoe said at the time.
"Companies in Ireland and across the UK can collectively breathe a sigh of relief today," the British Irish Chamber said in a statement.
(Reporting by Conor Humphries and Padraic Halpin; editing by Mark Heinrich)
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