Mr. Fergal O'Brien:

I thank the committee for its letter inviting comments from IBEC on this Bill. We wish to provide some economic and business perspectives on its likely impact. We recognise, however, that these are only one aspect of what the committee and the Oireachtas need to consider in their pre-legislative scrutiny process.

First, I will talk about what we see as the direct business and economic impacts of the Bill. In the engagement with our members on this Bill, they report limited impacts on their supply chains or direct trading relationships. As of May 2023, EU importers of any products from Israel must declare a new code on import declarations to benefit from preferential tariffs and quotas under the EU-Israel association agreement.

This code indicates proof of origin, and products are therefore required by EU law to be clearly identifiable as originating from the postcode locations known as the occupied territories and thus covered by this Bill. EU imports from the occupied territories are currently not covered by the EU-Israel association agreement and, therefore, do not receive the preferential tariff treatment provided by that agreement. IBEC members have indicated to us that Irish customs authorities should, therefore, be readily able to identify and prevent import of any products or goods originating from these postcode areas.

Our members have also reported to us that the level of goods trade between the occupied territories and Ireland is miniscule. Official trade data produced by the Central Statistics Office based on customs declarations shows that in 2024, only €214,000 of goods were imported from the occupied territories. Total imports over the course of the past five years stand at only €685,000. Data from the European statistics agency Eurostat shows that Ireland accounted for around 0.5% of EU imports from the territories last year.

I am now going to comment on what we see as some of the indirect impacts of the Bill. IBEC supports the Government view that rather than Ireland advancing legislative measures with regard to the occupied territories in isolation, measures impacting trade and international economic relations should be developed as a collective EU response. We recently supported the EU economic sanctions against Russia following the invasion of Ukraine. While recognising that the EU has failed to agree on any response measures to date, we believe that ongoing efforts should be made to build an agreed EU position with regard to how the bloc should respond to the International Court of Justice 2024 opinion on trade and economic relations with the occupied territories.

The committee may be aware that the majority of US states have passed legislation to counter boycotting of Israel and similar laws are also in place at a federal level in the United States. Many of these laws require businesses looking to engage in public contracts to certify that they are not involved in any Israeli boycotting measures. Businesses operating in Ireland and impacted by a Bill of this nature could, therefore, potentially be excluded from public procurement contracts or other commercial opportunities in large parts of the US and also face other potential penalties through that legislation in the US.

While the US has long been one of Ireland’s most important trade and investment partners, and the two countries have long-standing deep cultural, social and economic ties, it is clear that this most important of economic and international relationships is in a period where views may increasingly diverge. Business recognises that our two Governments currently have different views and policies on several economic and international relations issues, but the fact remains that our economies are inextricably linked. Any deterioration in US trade and investment with Ireland would have material impacts for households and businesses. It is very difficult to quantify what the indirect costs and reputational impact of passing this Bill will be or what material impact they might have on economic relations with the US. It is also difficult to weigh these costs against the other issues the committee and the Oireachtas need to consider in the pre-legislative scrutiny process. It is important, however, that consideration of the merits of the Bill include a recognition that these reputational costs may impact on Irish workers, households and businesses.

IBEC recognises the context in which the Bill is being progressed and the cross-party political support for the Bill. We recommend that all potential impacts of the Bill, including economic and fiscal aspects, be considered as comprehensively as possible. I thank members very much for their attention.