Tuesday, 26 March 2019

Questions (587)

Bernard Durkan


587. Deputy Bernard J. Durkan asked the Minister for Business, Enterprise and Innovation the degree to which she and her EU colleagues have taken into account and treated seriously the recent implied indicators of a trade war between the UK and individual EU countries as recently announced; the extent to which this country and the EU is alert to such developments; the action proposed to protect national and EU interests; and if she will make a statement on the matter. [14258/19]

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Written answers (Question to Business)

International Trade Policy is a competence of the EU Commission under the EU Treaties and defined as the Common Commercial Policy (CCP). Under this architecture the Commission represents Ireland and other Member States taking into account the needs of individual Member States and the collective good of the Union. As such, the EU is leading on all aspects of trade relating to Brexit.

Regarding Ireland and the EU's trading relationship with the United Kingdom once the UK has exited the EU, I am acutely aware that a no-deal scenario would have significant impacts for our economy, and certain sectors in particular. This is why the EU - with the full support of our Government - has agreed a Withdrawal Agreement with the UK Government with a view to negotiating a Future Trading Relationship with the UK once it has exited the Union. Such arrangements offer the best prospects of mitigating the negative consequences of the UK's exit from the EU for the UK itself, for the EU and for Ireland.

Nonetheless, in February 2018, my Department published research modelling the economic impacts of different Brexit outcomes. It showed that, relative to a status quo baseline - that is, on a no policy change basis - in 2030 Ireland’s GDP growth would be some 2.8% lower under an EEA type agreement, 4.3% lower under a Comprehensive Free Trade Agreement and 7% lower on WTO terms than would otherwise be the case. That is, our growth rates over the period would be reduced by the impacts of Brexit, assuming no other actions were taken to address and mitigate the Brexit impacts.

Given that exposure, the Government has consistently prioritised the need to avoid a no-deal scenario and maintain as close a trading relationship with the UK as possible post-Brexit.

As the Deputy will be fully aware, and as noted already, the EU and UK negotiators agreed in December 2018 the Withdrawal Agreement. This Agreement was the product of two years of negotiation taking into account the UK’s ‘red lines’ and the EU’s requirement to protect and support the single market and the Good Friday Agreement. The Deputy will also be aware that on 21 March, the European Council agreed with the United Kingdom to an extension until 22 May 2019, provided the Withdrawal Agreement is approved by the House of Commons during this next week. If the Withdrawal Agreement is not approved by the House of Commons, the European Council has agreed to an extension until 12 April 2019 and expects the United Kingdom to indicate a way forward before this date for consideration by the Council. The Government is hopeful of a favourable outcome in this regard and has noted that it is unfortunate that the UK Parliament have been, to date, unable to pass the Withdrawal Agreement.

As An Tánaiste and An Taoiseach have both said recently, Brexit is a lose, lose, lose scenario - i.e. the UK, the EU and Ireland all lose out. Nonetheless, were the UK’s intentions for the future partnership to evolve further, the EU has made clear that the Union is prepared to further adjust the Political Declaration that sets the parameters for the Future Trading Relationship, which is designed to ameliorate as much as possible the negative impacts on trade and employment that will arise from Brexit. All obligations and benefits of WTO rules will be considered in that context, but those considerations cannot be pre-determined at this time.

Finally, I might note that we have recently enacted the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (the ‘Omnibus Bill’). This piece of legislation allows the Government to amend a number of domestic laws in order to manage the negative sectoral impacts in the event the UK leaves the EU without reaching agreement on their withdrawal. Additionally, the Government, on both a domestic and international level, are fully engaged with preparing for Brexit. Along with our EU colleagues, our focus is on ensuring that the UK passes the Withdrawal Agreement which provides the clearest and legally unambiguous platform in which to begin talks on the future relationship, whilst, at the same time, ensuring that our most vulnerable sectors are protected from the worst impacts of Brexit. In that regard, my Department has been at the forefront of delivering, with our Enterprise Agencies, a range of measures aimed at assisting businesses navigate the economic challenges presented by Brexit with details available at www.gov.ie/Brexit.