First of all, I very much welcome the conclusion of the EU-UK Trade and Cooperation Agreement negotiations and the creation of a new framework for the EU-UK relationship. There were several occasions during the long negotiation process where a no deal scenario was a possible outcome, so a deal that includes market access provisions, tariff-free and quota-free trade as well as provisions aimed at preventing unnecessary technical barriers and requirements, is very welcome.
Having said that, the post Brexit trading environment does not allow for seamless trading that we previously enjoyed with the UK and businesses will inevitably face challenges as the framework underpinning the previous trading relationship with the UK has ended. Currently, we are seeing some short term impacts arising from new customs and SPS checks and controls and supply chains will in time adjust to their new arrangements and documentary requirements.
We are just approaching the 7 week mark since the Agreement came into effect and it is still much too early to ascertain the medium to longer term effects the Agreement will have on the various sectors of the economy.
In my reply - no. 135 on 17 December 2020 - to Deputy Richmond I set out the results of earlier analysis carried out in 2018 and later in January 2020 on the likely impacts of Brexit on key sectors of the Irish economy. The analysis identified five sectors that account for 90% of the Brexit impact and are the Agri-Food, Pharma-Chemicals, Electrical Machinery, Wholesale & Retail, and Air Transport sectors. Of these five sectors, the Agri-Food sector was shown to be the most impacted in both a trade deal or no-deal scenario.
IDA Ireland has of course been actively seeking to realise opportunities arising from Brexit-related investment to Ireland. Two-thirds of the over 90 new Brexit-related investments to date are in financial services, reflecting Ireland’s strength as a destination for activity in the sector. Ireland has also won Brexit-related investments in Life Sciences; Technology, Business & Consumer Services; & Engineering. These total new investments come with an associated jobs potential of 6,000.
My Department will continue to monitor and work with all sectors in the economy as they experience Brexit fallout while dealing in parallel with COVID-19. On Brexit, we are actively engaging across Government with hauliers and logistics companies, shipping companies, retailers, and business stakeholders to manage the issues arising from the new trading relationship with the UK.
I am committed to ensuring that the most impacted sectors of the economy will be given the State assistance they require. The proposal to allocate €1 billion in the first tranche of the EU Brexit Adjustment Reserve to Ireland is welcome and is strong recognition for the fact that Ireland is one of the most impacted Member States by Brexit. The fund will be used to mitigate the worst impacts of Brexit for the most impacted sectors in the economy.