The decision of the United Kingdom to leave the European Union creates considerable challenges for the agrifood sector. The United Kingdom is by far our largest trading partner. Last year we exported almost €5.1 billion worth of agricultural products. This included more than €1.1 billion in beef products and almost €970 million in dairy products. Ireland is also the United Kingdom's largest destination for its food exports which were worth €3.8 billion last year. This bilateral trade takes place on the basis of harmonised EU rules on animal and public health and labelling, without complex certification, quota limits or customs duties and tariffs. It is underpinned by the vital support of the CAP budget, to which the United Kingdom is a significant net contributor.
Given these linkages and as the United Kingdom is a net food importer, both countries have a strong interest in maintaining a close agrifood trading relationship. The resilience of the Irish agrifood sector is well recognised and this, together with the strong commercial relationships built up in years of trading, will help us to negotiate our way though the challenges ahead. It is important also to bear in mind that the precise implications of the referendum outcome will depend on the trade and other arrangements ultimately negotiated between the European Union and the United Kingdom. These negotiations may take up to two years, and perhaps longer, and during this period existing arrangements will continue to apply. Nevertheless, my Department had engaged in detailed contingency planning for the possibility of this result and has published a summary of the key actions we are taking to address the contingencies arising from the United Kingdom's decision. The most immediate concerns for exporters centre on euro-sterling exchange rates. It should be noted that the fall in the value of sterling against the euro, while significant, is not unprecedented. Nevertheless, a sustained period of currency volatility could be of concern. In that regard, the Central Bank of Ireland has pre-established contingency plans to deal with market volatility surrounding the referendum result. It will engage with the Department of Finance and individual financial institutions on potential risks. Actions by the European Central Bank, ECB, and other global actors will be monitored closely.
I have asked the relevant agencies, including Bord Bia, Enterprise Ireland and BIM, to provide practical guidance for SMEs. Last week Bord Bia announced a number of measures to support food and drink businesses.
Additional information not given on the floor of the House
These measures cover areas such as managing volatility impacts, providing consumer and market insight, deepening customer engagement and extending market reach, with the aim of helping companies to maintain their competitiveness. Similar support is also being provided by Enterprise Ireland.
Aside from currency fluctuations, the main areas in which potential impacts are foreseen are tariffs and trade, the EU budget, regulations and standards, customs controls and certification, while complex issues also arise for the fisheries sector. However, we must remember that our trading relationship with the United Kingdom is not altered in any way until the negotiation process that will dictate the terms and conditions of the United Kingdom’s departure is completed. In the meantime and as part of our overall contingency planning, I have taken a number of measures to ensure a sensible, coherent approach is adopted. I have established a dedicated unit in my Department to work on all of the issues I have mentioned. I have convened a consultative committee of stakeholders, which met for the first time last week, to ensure a full exchange of information as the negotiations proceed. I am ensuring the response of the relevant agencies is fully co-ordinated through a contact group established under the Food Wise 2025 High Level Implementation Committee. The Department will continue to feed into the central contingency framework being co-ordinated by the Department of the Taoiseach.