Mr. Simon McKeever:

This is in spite of all respondents having actively engaged in scenario planning for at least one potential post-Brexit impact on their business, with most respondents having engaged in scenario planning for the potential reintroduction of tariffs and customs checks, the routing of in-or outbound goods or the reintroduction of Border controls.

Irish exporters, especially in the food sector and particularly for fresh and perishable goods, are heavily dependent on fast and frictionless access to the Continent via the UK landbridge as a delay in transport time could cause their goods to go off. As a result, agriculture and food exporters continue to be extremely concerned about potential delays caused by potential customs and sanitary checks at exit and access points to Irish and UK ports. In terms of the landbridge, this is about not only the ports on the west of the UK but also the ports into the Continent as well. Such delays in transport times, especially for just-in-time deliveries for continental supermarkets, may have a detrimental impact in the competitiveness of the Irish agriculture, food and marine industry. In response, a number of IEA members are actively investigating transport and shipping alternatives to the Continent, such as directly by sea. The graph shows the measures being used to get goods off the island. Furthermore, exporters and importers on both sides of the Irish Sea are increasingly looking at stockpiling goods to mitigate any potential impacts. This is placing further strain on the already limited availability of warehousing space. This is an accelerating trend as we head towards the end of the year. There is massive demand from the industries such as the pharma sector, and increasingly the food sector, for warehousing space. Irish companies are seeking to stockpile goods in Ireland and in the UK, and UK companies are seeking to do likewise, such that there is a massive demand on warehouse space.

On market diversification, although the UK continues to be a key market for Irish exports, since the referendum in 2016 Irish exporters have increasingly looked to diversify their export markets to reduce their over-reliance on the UK market. In the IEA's January 2018, Export Eye, 66% of respondents stated their intention to diversify their business in the coming six months - up from 54% in June 2016. These figures complement the figures released by the CSO on external trade for 2017, which show an increasingly outward and global looking Irish export sector. In particular, the IEA is seeing a rising interest among members to enter and expand their business in Germany, the USA, France and Spain. In addition, Australia, the Netherlands, Canada, Belgium, Italy and Sweden make up the remaining top ten diversification destinations. What is stark from this for us is that the top ten diversification markets which are countries are looking to are all either very close or English language speaking. In terms of providing assistance, we are asked a lot of questions about the USA and Canada. There is massive interest in Canada. The early indications from our survey - we have as yet only received a response from half of the respondents - is that the USA is the number one market. Members will note from the graph the interest in other markets. For example, the markets that are further away are a bit down the pecking order in terms of the markets which companies are looking to. In addition, Irish exporters are increasingly shifting their focus on emerging markets in China, South Korea and Saudi Arabia.

On the impact of post-Brexit trade policy, the United Kingdom's withdrawal from the European Union is expected to have a number of potential impacts on Ireland's international competitiveness. This is mirrored by a general sentiment among IEA members that Brexit will have a harmful effect on the Irish economy, competitiveness and export sector. The UK has long been a strong advocate for a liberal European trading policy. With the UK's departure from the EU, the influence of the liberal trading countries may potentially be diminished - this is a particularly big issue - leading towards a more conservative, protectionist EU international trade policy. In any case, the Irish Exporters Association welcomes the recently finalised free trade and investment agreements with Japan, Vietnam and Singapore, as well as those currently under negotiation by the European Union with high-potential export markets such as New Zealand, Australia, Indonesia and the Mercosur bloc. We welcome the strong focus across all FTA agreements on reducing barriers to trade, increasing market access and supporting European businesses and regions through enforcing protected geographic indications such as Irish whiskey, Irish cream or Clare Island salmon. We have noted that when the EU does an FTA with another country, that country appears to be much more aware and better at getting the information out and, therefore, the EU and Ireland do not get as big an advantage from it. It may be a lack of awareness, but the EU and Ireland do not get as much as they could from the process.

The United Kingdom’s withdrawal from the European Union also has global trading implications beyond the bilateral relationship between the EU and the UK, in particular with respect to the EU's World Trade Organisation, WTO, tariff rate quotas, TRQ, for agriculture, fish and industrial goods, in respect of which members may be aware a row has brewed up over the last couple of weeks. In consideration of the UK's withdrawal, a revised EU TRQ schedule will have to be negotiated by the European Commission on behalf of EU member states. In view of the need to ensure legal certainty for businesses and the continuous smooth operation of imports under the tariff rate quotas to the Union we welcome the European Commission’s decision to proceed unilaterally to the apportionment of revised tariff rate quotas. In particular, this will ensure that the European Union, including Ireland, continues to have a high level of quotas when trading internationally in agricultural and fisheries goods after the UK's withdrawal from the European Union. We note, however, with concern recent reports on the blocking of the United Kingdom’s proposed draft TRQ schedules by a number of WTO members, including the United States, China, Australia and New Zealand. Under a disorderly Brexit scenario with a default WTO trading terms by the UK, the absence of an agreed schedule may significantly impede Irish companies' ability to trade into the UK. Therein lies the nub of the question regarding whether to revert to WTO tariffs and so on in the event of a crash-out.

On the impact of market diversification inside and outside the European Union, overall, when investigating new markets, Irish exporters appear to show a clear preference for European Union member states and English-language countries. With respect to the agriculture, food and fisheries sector, Ireland's close proximity to the Continent and associated short transport and shipping times are a significant factor for the popularity of the European Union as the predominant export diversification destination. Moreover, the cost reductions achieved through the common standards, rules and regulations provided through the EU's Single Market and the absence of customs and tariffs on intra-EU trade is frequently cited as a key factor for targeting EU member states when diversifying their export markets.