Dáil Éireann Debate, Thursday - 1 February 2024
231. Deputy Bernard J. Durkan asked the Minister for Finance the ongoing effect of Brexit on the economic performance in this jurisdiction as well as other EU Member States; and if he will make a statement on the matter. [4870/24]
View answerWhile it has now been close to eight years since the UK voted to leave the European Union, the implications of Brexit continue to play out. Following the end of the Brexit transition period on 31 December 2020, the EU applied import controls on goods moving from the UK to the EU, including Ireland. The UK authorities did not apply their controls at the same time.
After a number of years of postponements, the UK is now introducing new import controls under the UK government’s Border Target Operating Model, which will apply to qualifying goods from the EU, including Ireland on 31 January. This is the first in a number of phases of the implementation of these controls, with further milestones arising in April 2024. The new processes will have important implications for Irish exporters to Great Britain, particularly agri-food exporters, which will have to be pre-notified and be accompanied, in some cases, by export health and phytosanitary certificates.
The economic impact of Brexit has been playing out more slowly than expected, due to the phased nature of changes in trading arrangements under the EU-UK Trade and Cooperation Agreement (TCA). This does not, however, mean that the ultimate impact will not be felt by Irish exporters, and the wider Irish economy. Research by my Department and the ESRI from 2019 suggests that, over the medium-term and long-term, the level of Irish GDP under the TCA is expected to be around 2-3 per cent lower, compared to a ‘no-Brexit’ scenario.
That being said, anticipated introductions of import controls on Irish goods entering the UK have not materialised in the intervening period, having been postponed on multiple occasions. This will have given many Irish exporters time to diversify their export portfolios, lessening the ultimate impact of non-tariff barriers. Indeed, between 2015 and 2022, the share of total food and beverage exports going to the UK has decreased from 43 to 35 per cent. In addition, departments and agencies have had extensive stakeholder engagement with affected Irish stakeholders, coupled with communications and advertising campaigns, to raise awareness of these changes. This has been informed by extensive engagement with the UK authorities, to better understand and prepare for the changes.
We cannot ignore, however, that the administrative burden associated with the new import controls on many SMEs will be significant. Government departments will continue to engage with those impacted by these checks and any other relevant stakeholders to minimise associated costs, while my department will continue to monitor the economic fallout.
