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Trade Agreements

Dáil Éireann Debate, Wednesday - 26 June 2013

Wednesday, 26 June 2013

Questions (130, 131)

Bernard Durkan

Question:

130. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the expected benefits to accrue from the trade agreement between Europe and the US; the potential for this country; and if he will make a statement on the matter. [31117/13]

View answer

Bernard Durkan

Question:

131. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which he expects particular sectors here to be in a position to positively avail of the trade agreement between Europe and the US; and if he will make a statement on the matter. [31118/13]

View answer

Written answers

I propose to take Questions Nos. 130 and 131 together.

Following agreement at the Trade Council that I chaired on 14 June, the Commission now has a mandate to open negotiations with the U.S. on an historic Transatlantic Trade and Investment Partnership (TTIP). The formal negotiations between the EU and the US are due to begin on 8 July 2013. While it is far too early to anticipate the eventual negotiated outcome of the Agreement, the scope of the Council's negotiating directives to the EU Commission is sufficiently wide to maximise the potential benefits of an Agreement for the EU and its Member States.

According to assessments made by the EU Commission and other European bodies, a comprehensive Trade and Investment Partnership could over time boost EU GDP by 0.5% per annum and help create approximately 400,000 jobs in the EU. This would be equivalent to at least €86 billion of added annual income for the EU economy. Given the current very low level of economic growth in the EU and in Ireland, this will be a significant injection of economic activity and consequently of jobs. Based on those assessments, if Ireland simply benefited in proportion to the size of our economy within the EU, a comprehensive trade and investment partnership could over time provide gains to Ireland in the order of €800 million per annum in increased GDP, and 4000 new jobs.

An independent study by the London-based Centre for Economic Policy Research (CEPR), entitled 'Reducing Barriers to Transatlantic Trade', suggests the EU's economy could benefit by €119 billion a year, up to 80% of which would come from cutting unnecessary costs imposed on business by having to comply with two separate sets of rules, and from liberalising trade in services and creating new access for exporters into the huge public procurement market in the U.S.

While it is not possible to estimate in detail the impact on Ireland until there is greater clarity about any exchange of offers, the scale of the possible long term gains will have a positive impact on Ireland given our close trading and investment relationship with the U.S. In addition, many Irish exporters are part of European supply chains where their exports to the UK, Germany or elsewhere to the EU, feed into Europe’s exports to the U.S.

While tariffs are already low on trade across the Atlantic, the objective of abolishing even these will bring benefits to business in the short term. Tariffs that average about 3% on EU/U.S. trade may appear insignificant but even at this low level they constitute an unnecessary tax on trade with the U.S. by both foreign and indigenous companies.

The major benefits of course will arise from reform of regulatory restrictions applied by both economies. Many of these, such as the cost of having to meet two sets of technical specifications for consumer and other products, add extensive costs to exporters. In the longer term, if the TTIP brings about a regime whereby exporters would only need to meet one set of product compliance rules, it would save significant costs for exporters of medical devices, pharmaceuticals and chemicals among others.

In addition our agri-business sector would receive a boost if rules are changed that currently hold back our food exporters from being able to freely sell into the U.S. market, in the same way as they can into the EU.

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