Mr. Dáithí O'Ceallaigh:

I thank the Chairman and members for inviting us. I will deal with some of the generalities and Mr. Arnold will deal with trade and agriculture in particular.

The future is very uncertain and unpredictable. We really do not know where we will be in two, three, four or ten years time. It is very uncertain. Last week, the British Prime Minister, Mrs May, clarified where she would like to be, but this does not necessarily mean where she will end up. I will draw attention to several things she said, the first and most important point being the UK is leaving the EU. This is the only basis on which we can do business, at least for the moment.

In its judgment in recent days, the British Supreme Court made it clear that the negotiation of leaving the EU is a matter for the British Government and the British Parliament and not for the devolved institutions or the devolved executives. The Prime Minister made it clear she wants Britain to leave the Single Market. At the same time, she stated she would seek to have the greatest possible access to the Single Market, and I believe she used the word "frictionless". She stated she would do this through the form of a free trade agreement. All of this remains to be negotiated. What is clear is that the UK is leaving the Single Market. The Prime Minister did not state how this would be achieved.

The Prime Minister stated the UK will not be part of the common commercial policy nor will it be bound by the common external tariff. In effect, these issues are part of the customs union and it means there will be a break in the customs union. She also made it clear she wants to have control over the immigration of EU citizens into the United Kingdom. All of our discussions and thoughts about the future of Northern Ireland, the future of the relationship between Northern Ireland and the Republic and our relations with the United Kingdom need to be put in the framework of these points.

What does this mean for the Good Friday Agreement, the relationship with Northern Ireland and the relationship of the Republic with Britain? The Border and what happens on it will now be an issue for the negotiations between the United Kingdom and the EU. What we seek to get on the Border and what we seek as a State to get in the relationship with Northern Ireland we will have to pursue within the framework of the negotiations which will be carried out by the Commission with a very big input and oversight from the European Council.

In view of the British stress on the control of immigration, and especially because of the likelihood the common customs union will be replaced with something different, it is almost inevitable there will be a border between North and South in the future which will be different from the Border which exists now. If these things are to go through there will have to be some sort of control over immigration into the United Kingdom, which includes Northern Ireland, and there will have to be some form of control over the movement of goods between the United Kingdom and Ireland. It seems to me inevitable that in some way there will be a border which does not exist at present. It need not necessarily be a physical border, for example, the border between Norway and Sweden is not physical.

There is no border post where lorries have to stop and so on. There are rights for the customs and revenue people on one side to travel into the other jurisdiction. There are rights, for example, for Swedish customs officers to operate on Norwegian territory and for Norwegian customs officers to operate on Swedish territory. That might be one possibility. Another possibility is that with the development of technology and so on, there could be a lot of pre-clearance so that things could go through without stopping. I do think that there will be a border and that there will inevitably be extra costs for people in business and for people travelling from one jurisdiction to the other.

The second issue is the common travel area. The common travel area is perhaps a little bit more bilateral. It might be possible, one does not know, for the British and Irish Governments to agree some sort of arrangement to allow for a continuation of the common travel area. It will form part of the negotiations between the European Union and the United Kingdom. Like all negotiations of this kind, nothing will be agreed until everything is agreed. Do not think that it will be possible to have a deal on the common travel area up front. It will be part of the negotiations, but I would have thought that if the two Governments can reach agreement on the terms of a common travel area and put that into the negotiating framework, there would, I think, be a reasonable chance that the Europeans would accept it.

It is clear from listening to European sources, including Mr. Michel Barnier, that they are conscious of the problem caused by Brexit for the relationship across the Border, and that they are also very conscious of the unique problems which are faced in Northern Ireland. Northern Ireland is seen by the Europeans as a European success because the Europeans invested a very great deal in the peace process, as we know, through both the INTERREG arrangements and through the peace programmes in Northern Ireland. They know that has been a success and they do not want to throw it away. They are also aware of how fragile it is, as we have all seen in the last few weeks. I think there is probably a better chance of retaining the common travel area than there is of retaining the situation as it is on the Border. I would just offer a reminder of what Ms May actually said. She said that she would do everything possible to find a practical solution to the issue of the common travel area but, I quote, "while protecting the integrity of the UK's immigration system". There are steps here that have to be overcome.

I think overall, my greatest concern would be about the loss of a very close, daily relationship between British and Irish politicians and civil servants, which take place in Brussels. Every day of the week in Brussels, or elsewhere, there are meetings taking place in which British and Irish officials and politicians meet and do business together. Once the UK leaves the European Union, that sort of close co-operation that has existed for the last 40 years will disappear. It was only because of that close co-operation that the two Governments were actually able to bring the parties in Northern Ireland together and to bring peace in Northern Ireland. My greatest concern is that over a period, when the UK has left the European Union, those constant meetings of British and Irish politicians and officials will come to an end, and we will not find it as easy in the future to resolve the problems which always arise, as we have found over the last 20 years. I am not hopeless at all, but I think it is going to be quite difficult.