A year after the UK voted to leave the EU, a team arrived in Brussels this week to launch what the UK’s chief interlocutor, David Davis, has called the “most complicated negotiation of all time”. In recent weeks the atmosphere has changed.

The surprise UK election result offers a fresh chance to revisit what Brexit might look like, and offers an opportunity for the UK to shift its divisive hard Brexit trajectory.

While there are no guarantees it will happen, there is a compelling case for the UK government to reassess and redefine its approach.

The renewed squeeze on UK living standards and weak business investment as a result of Brexit highlights the economic risks that the UK faces.

Hopefully these economic factors, and the increasingly vocal concerns of British business will be brought to bear on the talks.

Regardless of how and when Brexit finally occurs, however, one thing is certain – the vote by the UK to leave the EU marks a Rubicon crossing for Irish-UK trade relations. The ambition to leave both the single market and the EU’s customs union is likely to dramatically change the economic relationship between our two nations.

The UK is a key trading partner and the primary market for many Irish businesses for a host of reasons, including market size, geographic proximity, a shared language and consumer tastes, and a similar common law legal system. Supply chains are intertwined across the two jurisdictions.

As such, any change in the EU-UK trading relationship, either through the introduction of tariffs or non-tariff barriers, will affect Ireland more than anyone else. A customs border on the island of Ireland would be an economic and logistical nightmare.

The UK accounts for 14% of Irish goods exports, the highest share of any European country. Irish-UK trade is even more significant for certain sectors, particularly jobs-intensive indigenous industries.

Agri food and drink for example remains particularly reliant on the UK market, which accounts for 40% of its exports (€4.4bn) and is the Irish sector most exposed to Brexit.

Fallout

Fallout from Brexit will make it increasingly difficult for agri-food and drink companies to retain their position within the UK food supply chain.

The products made in Ireland are often particularly suited to the British market and the commercial relationships are well developed, often having been built up over generations. So diversification isn’t easy and even where possible it can take many years to gain a foothold in new markets.

Brexit-related currency movements have already affected exports. This has already manifested itself in recent weak food exports, even if the rest of the Irish economy continues to power ahead.

A risk for agri-food and drink is that processors selling primarily to the UK market will choose to move their manufacturing operations to Britain as a way of avoiding possible future trade barriers and hedging against currency volatility.

Any deal must ensure a smooth exit, comprehensive transitional arrangements and the closest possible relationship into the future. It must also recognise the unique economic and political challenges for Ireland and include a range of specific measures to address these.

An early focus on avoiding a hard border with Northern Ireland is vital, but the Irish approach must also be informed by the greater economic importance of the east-west Irish-British trading relationship.

Additionally, alleviation measures will be needed to support indigenous exporters. A temporary EU state aid framework is needed to support those trading through any adjustment period and the European Globalisation Adjustment Fund should be reformed to ensure it can address the economic fallout of Brexit.

Funds amounting to 5% of the value of current annual indigenous export sales to the UK will be needed annually from domestic and EU sources to help Irish businesses innovate, diversify into new markets, train staff and invest for the future.

The Irish economy is powering ahead and is well positioned to respond to Brexit upheaval, but the risks remain very real. Brexit is a threat to our living standards and our economic ambition.