Dáil Éireann Debate, Tuesday - 20 June 2017
1. Deputy Gerry Adams asked the Taoiseach when he expects to be in a position to publish the planned document that outlines the Government’s approach to mitigating the impact of Brexit on the economy and trade; and the current status of this document. [25889/17]
Amharc ar fhreagra2. Deputy Eamon Ryan asked the Taoiseach if he will outline the Government’s approach to mitigating the impact of Brexit on the economy, trade and jobs. [25982/17]
Amharc ar fhreagra3. Deputy Brendan Howlin asked the Taoiseach to outline the status of proposals to be published by his Department to address the economic and trade implications of Brexit. [27241/17]
Amharc ar fhreagraI propose to take Questions Nos. 1 to 3, inclusive, together.
Following the adoption by the European Council of the guidelines establishing the framework for negotiations with the UK on its exit from the EU, the Council of Ministers adopted a decision on 22 May authorising the beginning of the negotiations, which are starting this week. The negotiating directives under which the talks will be conducted reflect Ireland's unique concerns: to support and protect the achievements, benefits and commitments of the peace process; to avoid a hard border; and to protect the common travel area.
I have already spoken to Chancellor Merkel, President Macron and Prime Minister May. I will attend my first European Council this Thursday, when we will discuss migration, security and defence, jobs and competitiveness as well as the Brexit negotiations.
Seeking the best possible outcome from these negotiations is a priority for the Government. In addition, the Government intends to intensify its focus on the economic implications of Brexit. Extensive work is under way across several Departments on these issues, including ongoing analysis of impacts at a sectoral level. This reflects the five elements that will underpin the Government's approach. The first relates to sustainable fiscal policies to ensure capacity to absorb and respond to economic shocks, not least from Brexit. The second relates to policies to make Irish enterprise more diverse and resilient, diversify trade and investment patterns and to strengthen competitiveness. The third relates to prioritising policy measures and dedicating resources to protect jobs and businesses in the sectors and regions most affected by Brexit. The fourth relates to realising economic opportunities arising from Brexit and helping businesses adjust to any new logistical or trade barriers arising. The fifth involves making a strong case at EU level along the lines that Ireland will require support that recognises where Brexit represents a serious disturbance to the Irish economy.
These objectives will be the basis for work by the new Government and will build on many initiatives already in place. Decisions in support of these objectives will also be reflected in the annual budgetary process; the forthcoming national planning framework 2040; the new ten-year national capital plan; the review of Enterprise 2025; and sectoral policies and investment decisions in areas such as agriculture, enterprise, transport, communications and energy. In taking this work forward, the Government will continue to engage with stakeholders, including through the all-island civic dialogue process.
My question was about when the Government expects to publish the planned document that outlines the Government approach to mitigating the impact of Brexit. I also asked the Taoiseach to give us a sense of the current status of this document. He may have done that and I may have missed it, but I would like him to clarify it.
If I recall properly, the last - and probably the only - comprehensive document on the Brexit negotiations was a most unsatisfactory production. We were all called to a meeting. We did not have copies of the document. We waited for approximately half an hour for the Taoiseach to join us. Then, given that we did not have a chance to read the document, the meeting was suspended.
The big issue is that the Brexit negotiations started yesterday. However, the Border issue, which was going to be one of the significant priority issues, has now been put into part of the dialogue under the authority of the co-ordinator rather than part of a working group. Can the Taoiseach tell us whether this issue is now being relegated to a status of lesser importance? Can he tell us what role the Government will have in this process? Given his statement that the North should stay in the customs union and the Single Market and that any customs checks should be on ports and airports rather than on land borders, can the Taoiseach tell us how he hopes this will be made manifest? Did the Taoiseach raise these issues with the UK Prime Minister, Mrs. May, in his telephone conversation last Thursday or in his meeting in London?
There is no date agreed yet for publication. That is for two reasons. I have appointed the Minister for Foreign Affairs and Trade, Deputy Coveney. He will have special responsibility for co-ordinating the whole-of-government response to Brexit. Our new people may need some days or a week or two to determine how exactly we are going to develop that document.
One of the difficulties in developing such a document is that we do not yet know the nature of Brexit. We have not yet decided whether we are going to predict what Brexit will look like and base the response for each sector on one particular outcome or whether we are going to take five or six or four or three potential Brexit outcomes and try to respond to each of those potential outcomes on a sectoral basis. That is difficult to do because Brexit with the absence of a free trade agreement is very different to Brexit that has a free trade agreement.
The United Kingdom has indicated that it still intends to leave the customs union and the Single Market. However, those involved seem to want to negotiate a new UK EU free trade agreement that would not leave them far off something not dissimilar to being in the customs union and in elements of the Single Market. We have to decide whether the document is going to predict what Brexit means and then have our sectoral response to it or whether we are going to have five or six different scenarios for what Brexit might mean and then have different sectoral responses to each potential outcome. That is a decision we have yet to make.
I agree with Deputy Adams. I was deeply concerned yesterday when, effectively, we were told that the Irish issue was going to be one of the top three issues but it seems now to be second-tier in that regard. Furthermore, one concern I have expressed all along is that even when we were getting agreement to discuss the Irish Border issues, it was exclusively on the question of the common travel area.
There was effectively no agreement. When Michel Barnier was here, he could not have made it clearer that there will be no discussions of cross-Border trade in Ireland in either goods or services. The Taoiseach is speaking as if we were completely removed from the talks and ineffective in our ability to steer what might happen. We need to be centrally involved in the issue of trade relations between Ireland and the UK, not just in the movement of people. It will have the greatest effect in terms of whatever deal is made. That there are to be no discussions until the autumn, when there will be a wider discussion of cross-Border trade issues for the Republic, is a further example of how we are losing our influence on the European side of this negotiation, whatever about the UK side. We need to start insisting that the trade issues in respect of Ireland and Britain, which are different from any others because of the land Border and the extent of trade between the two countries, be discussed today rather than in six months' time. We should direct Michel Barnier to do so rather than just accept as a fait accompli that they will not talk about trade until later.
I can assure the Deputy that issues particular to Ireland are very much in the top tier of negotiations that are now ongoing. The Minister, Deputy Coveney, will meet with Michel Barnier in the coming days. I will be at the European Council later this week and will meet many of my fellow Heads of Government, including Chancellor Merkel and others. I will of course, once again, flag Ireland's particular concerns and attune my European colleagues to our particular interests.
I always think the common travel area is a misnomer. There is much more to it than travel. The terms I prefer to use are "effective common citizenship" or "reciprocity of civic rights", namely, the right of Irish and British citizens to live, work, study, and access welfare, pensions, housing and health care in each other's countries as though they were citizens of both. At our meeting yesterday, Prime Minister May and I reaffirmed our commitment to retaining reciprocity of civic rights. Trade is a European competence, as Deputy Ryan knows. It will not be the case that Ireland can remain a member of the European Union and have a bespoke trade arrangement.
Will we go back to smog?
It is a European competence and is not one of the issues that will be discussed in the first part of the negotiations. The first part of the negotiations relates to the divorce, as some describe it - how much Britain will have to pay, the issue of citizens' rights and the issue of the Border in Northern Ireland and Irish issues in particular. It has been indicated by the negotiating team and the task force that if sufficient progress is made on those issues, we may be able to begin talks on the new trading relationship that will exist between the United Kingdom and the EU.
I welcome the Taoiseach to his first Taoiseach's questions. The issue of Brexit will loom very large in our discussions in the coming weeks and months. Yesterday, the Taoiseach met Prime Minister May and we heard yet again the commitment to the maintenance of the common travel area and to a North-South Border that is as frictionless as possible. However, we also heard a reaffirmation that it is now the settled position of the United Kingdom to withdraw from both the Single Market and the customs union. As Commissioner Phil Hogan said today, that means a hard Brexit and a hard Border. That is his assessment.
It is almost a month since the meeting to which Deputy Adams referred, when the Taoiseach's predecessor undertook to have this economic analysis presented. I understand what the Taoiseach has said in respect of gaming out a number of possible outcomes. The previous Taoiseach, Deputy Kenny, also said at the time that there would be budgetary implications, however. There are issues about which we have to talk and think now, for example, investment in our ports and rail systems, the realignment of the European globalisation fund, and looking at the geographic and activity sectors that are most impacted upon. Has there been any movement on those issues?
On the Taoiseach's discussions with the Prime Minister yesterday, it is quite clear that we will not have a trade agreement in the timeline envisaged by Article 50. Is there a settled view in Britain that there will have to be transitional arrangements after the formal exit of the United Kingdom from the European Union, which may last several years?
I dislike the terms that are often used about the Border, such as "frictionless".
Some people call it the Vaseline Border, it is so frictionless.
The latest term is "ultra-soft Brexit", which I assume is softer than a soft Brexit. The phrasing that best reflects our ambition as a Government is ensuring that there is no economic border between Britain and Ireland or between North and South. There is a political border, of course.
How is that to be achieved outside the customs union?
It will be very difficult. Any border that does exist, as I said yesterday, should be invisible. I was glad to hear Secretary David Davis use that term as well. It will be extremely difficult. Nobody fully knows anyone's end position. I certainly cannot speak for the British Government in respect of its negotiating position or end position. It could yet reconsider leaving the customs union and the Single Market. Deputy Howlin will know that his sister party, which had a very successful election in Britain, wants to stay in the Single Market, as do pretty much all the other British parties, at least.
Keir Starmer put forward a very interesting position yesterday.
I think it is fair to say this is still very much an evolving situation. We may find that if Britain leaves the customs union and the Single Market it may be still possible to negotiate a UK-EU free trade agreement that retains much, most or almost all of the elements of the customs union and the Single Market. For example, places like Switzerland operate such arrangements.
There could be budgetary implications, but again it depends on the nature of Brexit. One of the things I would envisage us having at some point is a transition fund for business, to allow business to adapt and change in reflection of the fact that Brexit will change the rules of trade. However, we cannot set up such a fund until we know the new rules of trade. That is the difficulty with all of these matters. We may need greater investment in some of our ports, such as Rosslare, for example, so that we can have better direct connections to continental Europe.
That will take years. We need to be doing it now.
Again, it will depend on what Brexit means because it will all depend on the land bridge arrangements. If they do not disrupt trade, it will not be necessary. If they do, it will be.
To respond in full to the Deputy's question, we did touch on the issue of transitional arrangements at the meeting yesterday. What Prime Minister May prefers to talk about is an implementation period. Whether there is a difference between "transitional arrangements" and "implementation period" that is more than language is yet to be determined.
I put it to the Taoiseach that the plan should involve all scenarios. We will need to publish the paper to which the Taoiseach alluded when it is drawn up. People get Ireland's unique situation, challenges, difficulties and so on. However, we are still light in terms of solutions. The fundamental issue is trade. Trade will govern the North-South relationship, the east-west relationship and the UK-Europe relationship.
Notwithstanding the British election which, on the whole, could be positive and might be an opportunity for a softer Brexit, the talk is still of exiting the Single Market and the customs union. Even the DUP's formal position is for exiting the customs union. One would hope there is a softer reality lurking behind that somewhere.
Trade will govern everything. I have argued for the past year and a half that we need a transition fund in place. We should be arguing with Europe that there will be a need for state aid considerations to be put aside or solidarity funding to be put aside to enable businesses to adjust. Already the agrifood industry has lost about €500 million in exports because of Brexit. British inflation will be heading above 3% shortly. The impact of Brexit is already here. While I accept we do not know the final shape of Brexit, we cannot wait until we see it to take steps to facilitate companies and businesses to adjust. My colleague, Deputy Stephen Donnelly, raised many issues pertaining to how Enterprise Ireland, the IDA and other State agencies could be enhanced in terms of their resources. The choice has been made not to do so up until now. We should be far more energetic in equipping our agencies to start working with other companies to get them Brexit-ready.
It is early days yet. The Minister, Deputy Coveney, and I will have to talk about this in more detail. My instinct is to produce a paper that allows for different scenarios. I am not sure we can cover all scenarios, given the number of different potential outcomes of Brexit.
There are 20 or 30 but perhaps we can take the five most likely-----
I am referring to the big ticket items.
-----or the ones that most resemble other situations like Norway, Switzerland, a third country or Canada.
In regard to the harm that has been done already to agriculture and to the enterprise sector, primarily that has been because of fluctuations in the value of sterling. Sterling has gone up and down previously, separate from Brexit. We have had currency fluctuations many times in our history. That is not to say it is not a problem that does not need assistance, but it is different from the impact that may arise from Brexit as a result of a permanent change in the rules of trade.
I agree that a transition fund will be necessary, but we have to know what that transition is and we do not yet know that at this stage. It is difficult to see how we could put a transition fund in place not knowing what the transition is to and if is it to something.
We could put it in place in reserve.
We could, yes. That is an option and I am not ruling it out.
Regarding the agencies the Deputy mentioned, we have provided additional resources to IDA Ireland, Enterprise Ireland and Bord Bia to diversify Ireland's markets. Also, business is being provided with vouchers and tools to assess whether they are Brexit ready, but I agree we will have to ramp that up in the time ahead. I do not dispute that at all.
We will move on to the second group of questions, Nos. 4 to 9, inclusive.
