Mr. Philip Carroll:

Mr. Kelly replied to most of the issues addressed by the Senators. Senator O'Reilly talked about optimism and I agree we have little grounds for optimism, most particularly in respect of the agrifood sector. However, I hope over the next 12 to 18 months that there might be a little more realism in the negotiations, especially about the impact they will have on economies around Europe and, in particular, the UK economy. There is a complete contradiction in the UK position. They want certain things but they are not wiling to accept obligations associated with their ask. For example, they may not have the same level of concern that we have about the agrifood industry but they have a concern about holding their ground in respect of financial services, IT consultancy services, and the automotive and automobile industries. They want to hold their position strongly in these areas but they will have to temper their requirements and demands on exiting to maintain the level of business they do with other European countries. There might be grounds for optimism in that respect. It may not be built on the agrifood sector but, nonetheless, nothing can be agreed regarding individual sectors with the EU unless everything is agreed. If there are any grounds for optimism, that might be it.

There is a misunderstanding about where the responsibility for market diversification lies in many respects. As Mr. Kelly said, we are exporting to 180 countries with 37% of our exports going to the UK. That means 63% of our exports are diversified across 179 other countries. That is massive diversification. Approximately half of those exports go to the European Community other than the UK and rest goes to other international markets. Diversification is not only about what the industry itself does; it is also about the Government having a responsibility and engaging with third countries with a view to gaining market access.

For example, there is ongoing dialogue that we hope will prove fruitful in the case of China. I refer to beef exports to the Chinese market. Last year we concluded an agreement on access for beef exports to the US market. The negotiations are in the initial phases and entail the Governments talking to each other and agreeing to the ground rules for market access. It will then be up to the industry to exploit it by negotiating with customers with a view to their importing product. We have been talking to China for 13 years. It is a very slow process and negotiations do not happen overnight. It takes two parties to conclude them.

Diversification also involves looking elsewhere in Europe. Bord Bia is looking at areas where it can seek to build a significant market share within the French, German and Dutch economies. Because of the implications of a hard Brexit, one must seek a share of markets that are already well supplied. That can have a impact in depressing prices when one seeks to enter those markets.

My final comment is on the United Kingdom proceeding to negotiate free trade agreements with other countries in a hard Brexit scenario. Mercusor agreement countries are engaged in negotiations on a free trade agreement with the European Union. The risk is that the United Kingdom will import products from Argentina, Uruguay and Brazil which could result in Irish products being locked out of the UK market. Ireland will have the tariffs about which I have talked imposed on its products in these markets, whereas a free trade agreement is unlikely to involve such tariffs. There will be a double-whammy unless and until we negotiate a free trade agreement with the United Kingdom.