Dáil Éireann Debate, Wednesday - 24 February 2021
39. Deputy Neale Richmond asked the Tánaiste and Minister for Enterprise, Trade and Employment if he has considered publishing an impact assessment on the UK-EU trade deal on Ireland; and if he will make a statement on the matter. [10349/21]
View answerAs the Deputy will be aware, the European Union and the United Kingdom reached an agreement on their future relationship on 24 December 2020, which provisionally entered into force on 1 January 2021. The Agreement delivers on the EU’s and Ireland’s objectives with businesses having access to zero rate preferential tariffs and quotas on goods traded between the EU and UK once the usual rules of origin for the EU-UK Free Trade Area are met. This is vitally important for the agri-food sector, for example, which would otherwise have faced very significant additional costs and barriers when trading with the UK.
The Agreement should also preserve the flow of trade and services with the inclusion of critical elements on energy, public procurement and services. It also contains welcome arrangements on road haulage, cross border bus services, rail, sea and air transport – all of which are vital for the easy movement of people, and delivery of goods and services.
In 2018, my Department, in conjunction with Copenhagen Economics, undertook a comprehensive study to consider the impact of Brexit on Ireland’s trade and economy. The focus of the study was on the long term impact of four Brexit scenarios, including a “Free Trade Agreement (FTA) scenario” for GDP, national income, exports and imports. All results were to be compared to a 2030 baseline had Brexit not occurred.
The FTA scenario used in the model reflected the average of all existing EU FTAs, rather than any single specific existing Agreement. Furthermore, following agreement in October 2019 on the Withdrawal Agreement and the Political Declaration for the Future Relationship between the EU and the UK, my Department commissioned further economic modelling to reflect the benefits of the terms of the Agreement and Political Declaration/Protocol on Northern Ireland. This Analysis calculated that growth levels would be 3.2 to 3.9 per cent below where it would otherwise be, depending on whether a "best-case" or "worst-case" scenario was modelled. This effectively reduced by half the adverse impacts on the Irish economy that had been forecast for a trading relationship with the UK based on WTO terms, and the study identified a lessening of the negative impacts envisaged for the more generic FTA modelled in the previous Copenhagen Economics analysis.
As regards undertaking a further impact assessment of the concluded EU-UK Trade and Cooperation Agreement (TCA), I believe it is too early to commence a meaningful economic and environmental impact assessment at this point as certain parts of the TCA and the Northern Ireland Protocol have grace periods or temporary derogations attached to them before they take full long-term effect. For example, by 31 March 2021 the 3-month derogation from the requirement to provide export health certificates on food supplies from Great Britain to Northern Ireland ends. On the other hand, a framework for regulatory cooperation in financial services between the EU and the UK is to be agreed by March 2021 and the EU is assessing the UK’s data privacy regime before deciding whether to grant a data adequacy decision in favour of the UK. Therefore, we will not have sufficient statistical data available to assess the totality of the impact of the TCA until such temporary derogations and all elements of the Agreement are fully in force, including any further easements or derogations that may be agreed under the TCA Joint Committee structures. However, I am fully committed to such post-implementation evaluation at an appropriate point.
In the meantime, I should note that my Department and the Enterprise Agencies are in constant contact with industry bodies including through the Enterprise Forum and the Retail Forum to identify where sectoral and regional impacts of the TCA are emerging at an operational level. We have a large number of Brexit supports including planning vouchers, consultancy and mentoring supports, the Enterprise Ireland Ready for Customs Grant of up to €9,000, as well as financial supports for adapting and restructuring business models and grants for research into new markets to assist companies respond to the new TCA dispensation. In addition, Budget 2021 provided contingency funding for COVID-19 and for all Brexit outcomes and the Government is committed to assisting firms on a dynamic basis in responding to Brexit, especially those firms that are in the most severely impacted sectors.
