Damien English (Meath West, Fine Gael)
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We will move on to the next topic and we are being joined by Mr. Gerard Monks and Ms Anne-Marie Finlay. Will the Minister update the committee on the progress on the EU-US trade negotiations? What will Ireland's role be in this partnership and what will be our key priorities?

Richard Bruton (Dublin North Central, Fine Gael)
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In trade negotiations the European Commission represents the member states but it works on a mandate provided by the member states. In June the Council of Ministers gave the Commission a mandate to start the negotiations on an EU-US trade agreement. The US is Europe's biggest trading partner. The EU-US corridor represents two thirds of all global trade. It is a significant area of opportunity. The idea behind it is to take the standard step of reducing tariffs and quotas, which is the bread and butter of trade agreements, but also to examine regulatory and non-tariff barriers and seek to reduce unnecessary barriers to trade, not by reducing the regulatory protection but by reducing the administrative burden that accompanies them. This is not about the EU telling the US what food protection measures it should have in place or vice versa but rather it is about making sure that artificial barriers to trade are not being created.

The third element of it is to evolve standards over time. If the EU and US are evolving product standards over time, that sets a standard, helps global competition in terms of the EU and US and encourages the opening of trade generally, as people move to a common standard.

It is a very significant potential agreement. Tariffs are generally low. At European level they are about 3% and in the US they are about half that level. The meat of these negotiations will not be in the tariffs but in reducing the administrative burdens or hurdles that prevent trade. The easiest example to highlight this point can be found in the pharmaceutical sector where there is an FDA test - an American test - for a product to be approved for use.

There is also a European test for the product. A company that wants to enter both markets has to separately comply, produce clinical trials and go through the whole rigmarole in each country. There is not mutual recognition of work that has been done, even if it is being done to a standard everyone agrees is an acceptable standard. To take out such a measure that simply adds a cost will improve the situation. We are not trying to say what the standard should be but that common rules and procedures would be used and people would apply them.

Various estimates have been made on how beneficial the process could be. The Commission believes the potential impact could be 0.5% of GDP per annum. On a pro ratabasis, in an Irish context there would be an approximate €800 million increase in GDP annually and 400,000 new jobs. This country could argue the case that the benefit would be more than pro ratabecause our trade with the US is about 6% of the EU trade which is significantly above where we are in terms of population but the figures are based on models that have been developed.

In terms of the benefits, a number of sectors could be involved such as those that process foods, chemicals, general manufacturing, financial services and insurance. They seem to be the areas where there are big obstacles. Public procurement is another area. There are areas where one could expect to see significant opportunities open up from the agreement. To date, there have been two meetings on the agreement. They have been scoping meetings. The first one covered cross-cutting and institutional provisions on regulatory issues, technical barriers to trade, sanitary and the phyto-sanitary area, which relates to food health, public procurement, raw materials, energy trade and sustainable development. The second meeting focused on maritime, air transport, energy, rules of origin, market access for goods, sectoral regulation, regulatory co-operation in financial services and cross-cutting regulatory and institutional provisions. We are not yet into the hard negotiation. It is more a case of positioning. A third round of meetings will be held on 16 December. We are still at the preliminary stage prior to a package emerging. The Commission announced it intends to set up an advisory group that would comprise representation of all stakeholder interests including agriculture, business, services, consumers, trade unions and NGOs. That will be a sounding board for the Commission as negotiations proceed.

Damien English (Meath West, Fine Gael)
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Is there any sector that can lose out in the process?

Richard Bruton (Dublin North Central, Fine Gael)
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As they say in the jargon, there are offensive and defensive interests. The defensive interest for us would tend to be agriculture, beef in particular, as was the case in the agreement with Canada in terms of lifting barriers or quotas and allowing in an increased quantity of product. It cuts both ways. In the Canadian agreement it was agreed to allow in 50,000 tonnes of beef carcases, 30% less in meat terms, but Europe was getting access to the Canadian dairy sector. There are swings and roundabouts. In the Canadian case, I understand they do not have hormone-free beef so they will not be able to supply the quota in the short term. It will be several years before they will be able to supply the quota. In these agreements there are always opportunities and defensive positions. The key is that there is mutual gain from dropping the barriers. It is the first lesson one learns in economics that if one takes down the barriers and one trades, everyone gains.

The US has already agreed to lift its protection against Irish meat, which was being banned on health grounds dating back to the incidence of BSE. That is a new opportunity even before any agreement is in place.

Damien English (Meath West, Fine Gael)
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Are intellectual property rights a concern given the protections in Europe in the area?

Richard Bruton (Dublin North Central, Fine Gael)
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Different approaches are adopted in Europe and the US to intellectual property rights. It would be an issue of contention. The EU itself is looking at its intellectual property rights framework. Many feel it is not sufficiently modernised to allow business exploit opportunities but at the same time I do not think there would be many in Europe which go to the extent of the US system which is based on fair use. That will be an issue of contention but the agreement will not necessarily require countries to change their regulatory environment. We are seeking to find a common approach. There might be harmonisation in some cases where it is agreeable but this is not about forcing a change in data protection, for example, where there would be concerns.

Damien English (Meath West, Fine Gael)
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If there are no further questions then I will thank the Minister and his officials for attending. Matters relating to the EU Council are important to the committee. We appreciate the briefings and the engagement we have received. Ten members will travel to Brussels for the purpose of fact finding and gathering information. We are trying to gain an understanding of how the system works as the issue is coming across our desks more in the past two years. We believe it will be an advantage to be better informed about the system. Following that, we can engage more with the Minister. The briefings have been most beneficial.