Mark Wall (Labour) | Oireachtas source

I thank our guests for their comprehensive opening statements and their answers to the questions asked. I have some questions for both of them.

In her introduction, Dr. Lawless mentioned that imports had increased in December with, perhaps, many of the manufacturing plants here stocking up a little. We are getting some evidence that supplies and parts are beginning to run low. Has the ESRI had any reports of that as well, particularly for those that are dependent on UK-manufactured parts? Does the ESRI think that will have much of a knock-on effect for manufacturing plants in Ireland? We have heard about those that have been directly affected over the past number of weeks.

Both witnesses spoke about opportunities, and Dr. Lawless mentioned foreign direct investment. What can we do to prepare for maximising that opportunity? How much of a part will language play in that opportunity? Obviously, with the UK gone from the EU, Ireland is the largest English-speaking country left in the EU. Does that give us an opportunity to target the American market and look for that foreign direct investment in Ireland?

Dr. Lawless also mentioned that, unfortunately, the burden is always more likely to fall on the smaller Irish firms. Is there anything we can prepare through our closing statement and report to help those smaller Irish firms to be ready for when the burden comes?

We saw quite a significant increase in imports of certain products in December, which would suggest stocking up by firms at the most risk of being hit by tariffs and extra costs. The only official data for December were released last week by the CSO so I do not have any more up-to-date information about stocks running low. The reduction in the flow of goods coming through in January helped to give more time for these new systems to bed in. It is a little difficult to disentangle the immediate impacts of Brexit in January from the wider shutdown of many activities due to Covid restrictions which happened at the same time.

Regarding opportunities for foreign direct investment, there is certainly a possibility that companies which want to invest in Europe to access the European market and that may previously have invested in the UK will look for alternative locations. It depends on how much their business is likely to be with the EU rather than the UK. However, for many businesses, the EU is a much larger market so it is an attractive position. Ireland already has a high share of foreign direct investment, including in computer services and high-tech manufacturing, so there is a good opportunity for that to be built on further. The language issue is important in making us attractive to foreign direct investment from the USA, as is a wide range of other factors such as the strong educational background and the historical political links between the two countries.

On the issue of small firms, as I said, many of these costs are per consignment. Whether one is exporting goods worth €1,000 or €100,000, one has to fill in the same documentation. For that reason, the cost falls disproportionately on small firms. Enterprise Ireland, the Revenue Commissioners and so on have done considerable work over the last year to show firms how these forms work and that a certain amount of customs documentation is a learning curve. Once firms have filled in these documents a number of times, the process becomes easier and easier. Other costs, such as the need for veterinary checks on food products, will stay. Many educational supports have been put in place already by the agencies, which is useful. There may be a possibility for firms to put together expertise in the freight forwarder sector, which would deal with much of this documentation on behalf of smaller firms. There may be opportunities to use that sector as a conduit.