Oireachtas Joint and Select Committees
Thursday, 1 February 2018
Joint Oireachtas Committee on Foreign Affairs and Trade, and Defence
Brexit Issues: British Irish Chamber of Commerce
I extend a warm welcome to Mr. Eoin O'Neill and Ms Katie Daughen from the British Irish Chamber of Commerce and look forward to engaging with them on their recently published paper, How to make Brexit work for all: Big Principles for a Strong Brexit Partnership. Today's meeting gives the committee the opportunity to hear the views of the British Irish Chamber of Commerce on the options for moving towards positive agreement for both sides after Brexit.
Before beginning, I remind members, witnesses and those in the Gallery to ensure their mobile phones are switched off completely for the duration of the meeting as they cause interference, even on silent mode, with the recording equipment in this committee room.
I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or body outside the Houses or an official either by name or in such a way as to make him, her or it identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.
I invite Mr. Eoin O'Neill to make his opening statement.
Mr. Eoin O'Neill:
On behalf of the British Irish Chamber of Commerce, I thank the members of the committee for the privilege of addressing it this morning.
The British Irish Chamber of Commerce is the only organisation representing business activities with interests across the two islands. It was founded as an output from the Queen’s visit to Ireland in 2011. Our raison d’êtreis to champion, protect and grow the trade between the UK and Ireland, trade worth in excess of €65 billion a year and that sustains over 400,000 jobs, evenly spread across Britain and Ireland.
As president of the chamber, I take great pride in the work we have done to date in promoting this trade. However, we now find ourselves in uncharted waters and every effort must be made to ensure that this trade that supports jobs, economies and communities across both islands does not become the first casualty.
The UK is Ireland’s largest two-way trading partner. In 2016, Ireland exported 14% of its goods and services to the UK while we imported 11% from there. In goods trade alone, the UK is the source for nearly a quarter of all Irish imports. The significance of the UK market to Ireland is most evidently seen in our food and drinks sector. Despite a fall in the overall share of exports destined for the UK, 35% of our food and drink output still ends up in this market and exports to the UK grew by 7% last year to €4.4 billion.
The British Irish Chamber of Commerce works on behalf of its members, large and small, North, South, east and west, connecting them to fresh business opportunities between and from these two islands, growing trade, investment and jobs. We want to ensure this work continues beyond the current crisis that now faces us. The implications for business which arise because of the UK’s vote to leave the EU is an issue which consumes the British Irish Chamber of Commerce and our work around Brexit. As the only organisation representing business interests in both islands, we are uniquely placed to see both the opportunities and challenges which now face the business community as it prepares for what is currently an uncertain future.
The British Irish Chamber of Commerce welcomed the publication of the joint report on phase one of the negotiations by the European Commission and the UK Government last December. Its adoption meant an important milestone was reached on phase one of the negotiations which now allows us to look to the future of UK and EU relations, as well as the trade environment which might emerge after Brexit.
What was agreed in December has given rise to much debate.
By taking the text of the joint report and reading paragraphs 49 and 50, it would seem to state that should an agreement not be reached that avoids the need for "any physical infrastructure or related checks and controls" on the island of Ireland, then it continued:
The United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.
Furthermore, Paragraph 50 states that no new regulatory barriers will develop between Northern Ireland and the rest of the UK. This then means that any solution found on a North-South basis should equally apply on an east-west basis. The easiest way to achieve the above would be for the UK to remain in both the EU customs union and Internal Market. Should this not be possible, the adoption of a future framework such as that outlined in the chamber's document entitled Big Principles for a Strong Brexit Partnership would also meet the conditions as set out in the joint report.
Where the confusion arises is that even after the UK signed up to the joint report, its Government stated that the UK still intends to leave the EU Internal Market and pursue its own trade deals. This is a circle that simply cannot be squared. It is not possible for the UK to pursue its own trade agenda while maintaining borderless trade with Ireland and, therefore, the rest of the EU. Rules of origin, standards, and regulatory compliance checks as well as the collection of customs duties, all take place at borders.
In order to maintain the integrity of the EU Internal Market, it is essential that all goods entering this market from external markets are checked to ensure it is not compromised. Even if the UK retains full alignment with the EU on regulations and standards so that goods entering the UK under its own deals would be fully compliant with EU conditions, border checks of some type would still need to take place in order to collect the appropriate customs and duties on these goods. Until the UK comes forward with proposals on how it will address such a conundrum, business will remain uncertain, and plan accordingly, about what its future trading environment will ultimately look like.
What I have said so far is mainly concerned with the trade of goods but the UK is a service economy. The risk that Brexit poses to the city of London and the broader service sector is real and should not be underestimated. The chamber was recently in Brussels for extensive engagement with the EU Brexit negotiators and senior representatives of the parliament, where it was said to us, on many occasions and from various sources, that without Single Market membership there is zero possibility of the UK keeping its passporting licence for financial services into the EU. This is a hard reality and, if anything, reflects some of the anger and anti-UK sentiment that is developing in Brussels and across the EU over the Brexit issue.
It is for these reasons that the chamber has taken a proactive approach. We have put forward a solution that we believe addresses many of the concerns while also taking account of the political reality within the UK. What we are proposing is a politically ambitious but technically achievable solution that outlines the chamber's vision for a possible trade framework for the UK and the EU post-Brexit.
The key objectives of our document entitled the Big Principles for a Strong Brexit Partnership include: A trade relationship between the UK and the EU that is effectively borderless, including in Ireland and at UK ports, and free from tariff and non-tariff barriers that will enable trade in both goods and services; an alignment of the UK's tariffs with the established common external tariff and continued regulatory alignment to both maintain standards and protect the UK and the EU from an influx of cheaper, lower quality goods that would endanger citizen safety in manufacturing and food production; a solution to the island of Ireland border issue and the protection, critically, of the Good Friday Agreement; a joint approach to mutually beneficial trade deals rather than the UK's sole pursuit of global Britain, which we view as being of less benefit to discussion; we acknowledge the wishes of the UK population in the referendum, particularly to take control and allow control of the migration policy, and we see the agreement encompassing the UK being able to set its own migration policy; and an alternative model to the Court of Justice of the EU, CJEU, for dispute settlement, just as in other EU trade deals. The paper proposes that all of this be achieved through a customs arrangement between the UK and the EU. The arrangement will cover the trade of goods between parties post-Brexit. Continued regulatory and tariff alignment are key pillars of the proposal.
Alignment in both would remove the need for regulatory standards and customs checks to take place along borders. It would ensure that the UK and EU are protected from an influx of cheaper, lower quality goods that might compromise standards in manufacturing and food production. In addition, such measures will also protect the integrity of the EU's Internal Market and customs union, a key requirement from the EU in all of its documents to date, making the possibility of borderless trade between both markets more achievable.
Unlike previous EU customs agreements, this proposed arrangement goes further in terms of trade with third countries. It is proposed that the UK has an input but no veto into future trade deals and automatically has access to these markets under the same conditions as those for the EU. If the EU was to complete all its trade deals that it is currently negotiating, 88% of UK trade would be covered by those deals. Furthermore, Prime Minister May previously stated that the UK, in its international trade negotiations, is willing to mirror deals made between the EU and third countries with Japan being a prime example. This model would at least provide the UK with input into the negotiation of these deals.
The proposal also recommends that the customs arrangement be coupled with a comprehensive deal on the trade in services. It points to the Comprehensive Economic and Trade Agreement, CETA, and the EU's deep and comprehensive free trade areas with Ukraine, Georgia and Moldova as possible models to follow to achieve this.
As the UK will leave the Single Market, the proposal allows the UK to meet its stated objectives of managing its own immigration policy and removing itself from the direct jurisdiction of the Court of Justice of the EU. It is proposed that the final agreement be governed by an international dispute resolution mechanism where grievances and complaints can be brought and whose judgments should be binding.
We are now at a crucial stage. Discussions are due to start this month on the shape and conditions of a transition arrangement. The EU has been clear in its recent directive that for a transition phase to be accepted, the UK would have to retain all current obligations and requirements of EU membership, including financial contributions, while losing its voice and representation in the EU institutions. Also, worthy of note and potentially worrying for business, the EU has recommended that the transition phase should end on 31 December 2020. That means it would be shorter than the two-year period previously requested by Prime Minister May. It should be welcomed that the Secretary of State, David Davis, last week while giving evidence before the House of Commons Select Committee on Exiting the European Union, seemed to accept these conditions.
Both the conditions of the transition phase and the full withdrawal agreement text will need to be finalised by October of this year to allow time for ratification across the EU institutions and in Westminster. Talks on the framework for the future relationship are expected to begin in March. They would need to be finalised during the transition phase if we are to avoid a further cliff edge scenario. The nature of the future relationship will not be discussed in detail until after the UK has left the EU on 29 March 2019. This timeline shows that the clock is ticking, and that we need to see some urgency from the UK Government in putting forward its proposals for its future relationship with the EU. Brexit is possibly the biggest economic challenge of this generation. Therefore, we should not let it happen without ensuring that the risks are well known to all. The British Irish Chamber of Commerce will continue to put forward and advocate strongly for sensible solutions that best protect the prosperity and trade that both our islands currently enjoy.
I thank the committee for the opportunity to address it and I invite members to ask questions.
Mr. Eoin O'Neill:
They were positively received in the context of a constructive attempt to show a roadmap for the future. Our visit to Brussels coincided with the signing or acceptance that week of the joint report and Prime Minister May's return visit on the Thursday. We were in Brussels during that week. In all of our engagements in Brussels there was a desire to see a constructive voice of business coming to the table with constructive suggestions. We were well received against that backdrop.
I compliment Mr. O'Neill on his work. I had the opportunity to listen to him speak in Liverpool when he made a presentation at a British-Irish Parliamentary Assembly meeting. He gave a great outline to both members of the British Parliament and ourselves on the challenges. Ms Daughen has also participated at public meetings that I organised and took place in my own constituency. The work done by Mr. O'Neill, Ms Daughen and the chamber has been very important in highlighting the importance of trade between both islands. As the chamber has rightly pointed out, and a fact that is often overlooked, that bilateral trade worth €1.2 billion takes place every week. Another fact that is overlooked is the one whereby Irish investment supports 200,000 in Britain.
Plus British investment supports 200,000 jobs here.
It is a two-way trade. It is very important for us to bear it in mind in any decisions that will be made in addition to the importance of the linkages on a business level between both countries. One theme that ran very strongly through Mr. O'Neill's presentation was the notion of an uncertain future. I represent two of the southern Ulster counties and a lot of businesses there are very heavily dependent on the British market. The agrifood, construction, construction products and engineering sectors are more heavily dependent on Northern Ireland and the British market than others. They are very concerned about planning for the future. Members of the House of Commons foreign affairs committee visited Cavan and Monaghan and met local interests from the agrifood, hospitality, transport and other sectors. The message we all got from those interests and sectors was they are concerned about planning ahead in their businesses. March 2019 will come very quickly. The transition period will end in December 2020 which is not far away in business terms for people who have to plan business for the future. There is a very strong message there in regard to the concerns of business. Does the British Irish Chamber of Commerce have constituent members in Northern Ireland?
Mr. Eoin O'Neill:
We have members across the two islands in all jurisdictions. We have been active in both Northern Ireland and the South. We recently held a very significant briefing for small and medium enterprise in Belfast in partnership with Invest Northern Ireland and more than 300 people turned up. Mr. David Sterling, the head of the Northern Ireland Civil Service, and Julie Sinnamon from Enterprise Ireland, spoke which is a reflection of the cross-border nature of trade and activity. A lot of the concerns the Chairman addressed were raised at that forum. It is equally challenging on the other side of the Border if they are exporting to the South. There are challenges on both sides of the Border. We have interests and membership spread right across the UK. In particular, we straddle many of the organisations that provide goods and services in the UK and Ireland. They are committed to both jurisdictions and will be faced with these issues.
I will make one final comment before I bring in my colleagues, Deputy Darragh O'Brien and Deputy Maureen O'Sullivan. What has been the Government's reaction to the proposals outlined in the strategy?
Mr. Eoin O'Neill:
We have received a very favourable response from Government and it has been supportive of us, as has the UK Government in terms of outlining a constructive route forward. We receive total support from State agencies and the Department of Foreign Affairs and Trade in our work. We commend them on their work and the support they have provided to us and business in forging a future strategy. As the Chairman correctly pointed out, the big problem at the moment is the unknown. The unknown end game in this is probably the biggest single challenge we face because in an environment when we do not know what the end looks like, it is very hard to plan for it. That is what the biggest concern of business is.
I thank Mr. O'Neill and Ms Daughen. I appreciate all their work to date. I had dealings with Ms Daughen in early January and some of my colleagues in Fianna Fáil spent two days around Westminster. We got great assistance from Claire who does a lot of work with the British Irish Chamber of Commerce, Member of Parliament, Mr. Conor McGinn, and the APPG group.
The question is how to make Brexit work for all of us. It is an easy question to ask but getting the answers is difficult. From my contacts with colleagues in Britain through the foreign affairs committee and through my role as foreign affairs spokesperson for my party, it is clear there are very different views within the British Cabinet and Parliament depending on the committee one talks to. One specific area I want to ask Mr. O'Neill about is the agreement on phase one. We tried to interrogate this when we were in England the week before last. Our understanding of it is that no regulatory divergence applies to North-South and that will extend, de facto, to east-west. If that extends to east-west, it means that lack of divergence will extend further into the EU. If Ireland, as an EU state, has no divergence with the UK after it leaves, it would mean Britain would effectively have no divergence with the EU and the other EU 26. We put that question to the foreign and commonwealth office and the Brexit office in No. 9 Downing Street and there was a different view in both of those offices; they did not necessarily believe that would be the case. Mr. O'Neill highlighted the need for them to stay within the customs union so as not to bring about further tariffs or border checks. We know that. Phase one was the easiest, if any of it could be called easy. Phase two is what will really be difficult. We are into senior hurling now, to use an Irish phrase. The British will understand that pretty soon. What Mr. O'Neill has been able to do is set out a sensible approach. I want to ask about the regulatory divergence. What is the British Irish Chamber of Commerce picking up? Is the understanding in Ireland the same as it is in Britain? With regard to the extension of the transition phase, Mr. O'Neill mentioned the Secretary of State, Mr. David Davis, seemed to accept that. Mr. O'Neill is saying very clearly that he thinks the transition phase is too short. I agree with that. It is important that we, as a member state, ensure the integrity of the European Union and that the strength of the union remains intact. We can be reasonable.
The British Irish Chamber of Commerce has a role in continually highlighting the trade issue. I will turn to that issue now. In all of our discussions in Brussels, it is clear that our colleagues in the European Union fully understand the situation with regard to the North. They understand that the maintenance of the Good Friday Agreement and the rights of Irish citizens in the North, who by extension are EU citizens, is really important politically and socially on the island. I have a concern that the European Union may feel that if that element is dealt with the trade issue is secondary. The Chairman and Mr. O'Neill have outlined that 400,000 jobs on both islands are underpinned by the substantial trade done between the islands. We need to continue to reinforce that. I am worried the attitude will be, although not in a flippant way, that the Good Friday Agreement has been dealt with and therefore we will not get assistance on trade issues. What more can we do here to try to get that message across? Does Mr. O'Neill agree it is timely for the European Union to look at an EU reform fund to support businesses that are heavily vested in the UK market? I get a sense that state aid rules have loosened in Britain to a great degree already and may not be following the letter of the law with regard to EU state aid rules. We need to have a level playing pitch when we are competing with British companies. Our exporters and members of the British Irish Chamber of Commerce need assistance. What more does the Irish Government need to do? I have asked both the Minister for Foreign Affairs and Trade and the Minister of State, Deputy Helen McEntee, why we have not asked at the Commission for a relaxation of state aid rules. In the agrifood sector in particular, there are areas that need assistance immediately. For British businesses in Britain, the pinch is being felt now as a result of the increase in import inflation, inflation and the drop in net wages as a result of inflation in Britain. Does Mr. O'Neill get a sense that Brexit is beginning to bite there? Does he agree the reality is dawning and the hard Brexit attitude that no deal is better than a bad deal, to quote John Redwood and others like him, is losing currency in Britain?
I thank Mr. O'Neill for his presentation and for all the work he is doing. I might come in again afterwards.
Mr. O'Neill was very clear and comprehensive. He presented in such a way that I, as someone with no economic or business background, could understand clearly. He summed it up when he said it is a circle that cannot be squared.
I have other questions. The witness mentioned the reality of the anti-UK sentiment in Brussels and across the EU. How confident is he that Ireland will not be caught in the crossfire and it will be protected? Are there opportunities for Ireland to do even better post-Brexit? The witnesses are from the British Irish Chamber of Commerce but we must examine our trade with other countries rather than being so heavily dependent on one market.
Mr. Eoin O'Neill:
We will share this between us as there was quite a lot in the two contributions. I will start by addressing Deputy O'Brien's questions. With respect to where we are with the negotiations, he is correct in saying Articles 49 and 50 in the agreement underpin the understanding and it is our understanding too. For North-South and east-west, there it is an equal understanding. It is not sovereign-dependent but it goes to Europe and the UK. It is absolutely our understanding as well. It is an agreement and not a treaty. It is a phase and not the end. In the context of the negotiations, we have come through a gate but it is not a binding gate in many respects. It is a key element of what we are about.
We go to the UK quite a lot and I too have been in those hallowed halls. I have met some of those people and some very senior UK politicians. We have spent time with Philip Hammond, David Davis, Boris Johnson and others. We heard them articulate the need, for example, for a long-standing relationship between the UK and EU going forward. We have equally witnessed the demand for a global Britain agenda and where that would take the UK's market. We point out in our document that 88% of where the UK would like to trade is covered under current or future EU treaties. In that context, we would contend strongly, particularly when we speak in the UK, that the best is in what they have already and the treaty arrangements already in place. Why would they compromise those in the effort to seek the additional 12%? We articulate that view very strongly.
Whereas there is a continued focus on global Britain in the public media and articulations coming from elements within the UK Government, it will be increasingly difficult to arrive at a treaty-based decision on the future of the strategy. That is our single biggest concern. The House of Lords committee was here on Tuesday and they attended the House as well. I made a presentation to them and articulated our view that there is no future for a global Britain approach against the backdrop of negotiations. One cannot be any clearer than that in what we seek. We are very strong in that regard.
The engagement into Europe and the relaxation of state aid rules flows to Deputy O'Sullivan's question about the relationship with Europe. The absolute strength of the relationship between Ireland and the European Union has been very obvious to us as an organisation, and in particular the support given by the EU to Ireland around the critical matter of protecting the Good Friday Agreement. We are all of a generation where we remember the bad times and we are not going back there, so we must protect that. The support achieved by Ireland right across Europe for that is critical. That is not to say the sentiment towards the UK's departure from Europe has not left a scar across Europe. Many European countries are very upset about it and they are determined that on exit, a hard bargain is driven for Europe and its protection. It is important not to confuse the two. Ireland needed to ensure the protection of the Border was critical to phase one. In the next stage of the negotiation process, the protection of our trading links with the UK will become increasingly important. As the Tánaiste and Minister for Foreign Affairs and Trade articulated at Chatham House last night, there is a need for Ireland to be the UK's best friend in many respects in the negotiations. That will underpin and protect the trading relationship.
Ms Katie Daughen:
The regulatory divergence piece was mentioned. We would read it in the same terms as the members and what is put down in the joint report. It implies regulatory alignment should be maintained as a fall-back for North-South and therefore east-west relations, and this would mean it would function as such between the UK and the EU. The difference between the Foreign and Commonwealth Office and the Brexit office is that, politically, the UK Government believes it can get a deal that can secure all this, meaning we will not have to go back to the fall-back position. UK Secretary of State David Davis has even said they still believe there is a "CETA plus plus plus" on the table. Each time he speaks about it the concept seems to get an additional plus.
Ms Katie Daughen:
It very much depends on to whom one speaks and where they lie in the debate. There is division not only within the Cabinet and the British Government but within individual parties. We have been in Westminster twice and there is a possible visit planned for later this month, and we have advocated strongly on the proposals. It depends on where people would lie within the spectrum of their belief on Brexit. Those who are hard-line Brexiteers want to leave the EU and have very little association, politically, with the EU after Brexit. They do not feel a solution like this will work but rather in absolute free trade and the global Britain agenda, as Mr. O'Neill alludes to. Those who want to remove some of the political ties from the EU institutional role within the UK are more open to a trade solution, as we put forward in the big principles. It is very hard to know. It is worth noting that since we published this paper last November, the CBI - Ireland's equivalent to IBEC - came out with something similar the week before last. It is rumoured that Labour's policy position is also moving to something similar to what we have put forward in the principles. There is a shift and this is constantly evolving. Without some formal framework for regulatory alignment and trade tariff alignment, it is very hard to see a way in which those commitments made in the joint report can really be met.
The EU has been very open in what is on offer and there is not a CETA plus plus plus on offer. It is CETA or the Internal Market. There might be some openness to a customs arrangement like we propose, given that it kind of relies on the status quo. If the UK wishes to trade, it is very hard to see how it can have its own trade deals with third countries while maintaining open borders on the island of Ireland and east-west as well.
There is the point about the transition phase being too short. The EU Commission has set the deadline of 31 December 2020 on the basis that it is the end of the current multi-annual financial framework. There probably would be an option to extend the transition phase beyond that but it would require the UK paying into the next framework budget, which could be very sensitive politically within the UK. There is a possibility nonetheless.
The Good Friday Agreement and the trade piece was mentioned. The Good Friday Agreement has rightly been given much focus. We believe we are putting forward a trade framework that could almost address many of the concerns around the Good Friday Agreement and uphold the commitments of both Governments to it. We are trying to take it from a different angle and say that within trade one can almost address many of the concerns or issues that have been raised.
Mr. Eoin O'Neill:
I will finish by addressing Deputy O'Sullivan's question on Ireland and expansion of our trade footprint. It is a very important question and it consumes the discussions with members and their ability to plan for the future. We very much commend the work of the State agencies, particularly Enterprise Ireland, in their resolute attempt to get businesses to focus on the implications of Brexit and where it might take them but also on the need to expand markets. It is worthy of note that the work being done, particularly by the diplomatic service in the Department of Foreign Affairs and Trade should be commended. The opening of five new missions abroad will help significantly. We have seen at first hand the critical work that the ambassador and the teams do, particularly abroad in flying the flag for Ireland. Sometimes that is in difficult markets or areas.
That Irish presence definitely opens the door. I would particularly encourage businesses which have not so far taken steps to do so. A survey of small and medium enterprises produced last week by the Minister, Deputy Heather Humphreys, in conjunction with Enterprise Ireland, showed only 16% had taken a step forward to prepare their Brexit plans. That is too small a number. The number needs to be increased and there are supports and grants available for businesses to work in that area. We beat a constant drum in terms of talking to small and medium enterprises about the need to step up and do some prep work in that space. I understand that small businesses are busy doing what is required for the day job, but planning a strategy for where it might take them will be very important. The money and funding is available and the work Enterprise Ireland is doing to try to open up new markets is critical, in partnership with the Department of Foreign Affairs.
Ms Katie Daughen:
I was about to come back to that. I realised I had not addressed those issues. With regard to the Deputy's suggestion on the EU reform fund, it is something for which the chamber has previously advocated. It is in our SME committee's policy paper on Brexit which was published last summer or autumn. I am happy to provide the Deputy with a copy. We believe there should be an EU reform fund to help not just businesses in Ireland but those across the EU who are facing challenges because of Brexit in order to make sure they are not unduly impacted by a decision which is not of their making. It is something we have considered.
That is something to reinforce. The reason for the EU reform fund is not Ireland specific. Rather, it is EU wide and that is why it would be much more acceptable for it to be available for all businesses affected by these changes.
With regard to the comments on the British Labour Party, I heard Mr. Corbyn talk about a customs union. When Mr. Starmer visited Donegal and Derry on Monday, I understood from the commentary attributed to him that he spoke about membership of the customs union. I am not sure whether the commentary was accurate in regard to Mr. Starmer. It seems to be a move in a direction we would favour.
I wish to begin by thanking the witnesses for their presentation. The more I read and listen, the more concerned I become. We have every reason to be concerned. We started off with a great blaze of publicity because everything was concentrated on Ireland initially. That is fading and will continue to fade. We should not be fooled into believing that everybody is going to be looking after us. The reality is that we are the real losers.
Ireland must demand protection. The idea of people coming into Ireland without a so-called boundary with the UK is a dreamland when we get down to the nitty-gritty. The current situation, whereby I can get off a plane or boat in Dublin, hire a car and make my way to the North of Ireland without anybody stopping me, and then make my way into Britain, will not continue. It is not reality. I do not care what people say or what so-called agreements are in place. It is not practical and has all sorts of implications for us. We will become a gateway into the EU. We will take on a great deal of responsibility because we have a boundary to protect on behalf of the EU, just as Britain has a boundary to protect on its behalf.
The more I watch television and listen to debates, the more convinced I am that we are too quiet. We should be in every discussion and debate that takes place, consider our position carefully and demand more than what we are getting. We had a blaze of glory for a couple of days, but that has faded. We are now getting different versions of what was supposed to be agreed in regard to Ireland.
I follow the issue very closely on television. I am a great watcher of BBC television in order to find out exactly what is happening. At times I say to myself that this is not what I was led to understand. Time is marching on. I am delighted that the witnesses and their group are taking such an active involvement in this, but they deserve greater backup and support and it is time that was provided. We as committee members need to keep highlighting that we cannot be forgotten. There cannot be a mindset that Ireland has been sorted out. Ireland has not been sorted out.
Anybody with a brain between his or her ears cannot answer my question. As I said, the idea that I can get on a boat or plane, land in Ireland and drive to the North of Ireland and access Britain without anybody stopping me is not for real. It might last six months initially, but then all of the difficulties will appear. There will be goods brought in through back doors. I was a Minister for Defence at one stage and brought the visitors to see what the Border is actually like. They were flabbergasted to see that there were no gates or walls. There are open fields and mountains. It is impossible.
I get the feeling that these negotiations are going on, but at the end of the day the real loser will be Ireland which has taken on a significant responsibility given that we are the only land gateway into Britain. We are saying that the land gateway will be unprotected. Realism has to come into this debate. We need to work together and be more demanding about getting answers now to the sort of questions I and others, including the witnesses, are posing. This issue cannot go into 2019 and 2020. When it comes to the rubberstamp, Ireland will be told it cannot stand in the way of the agreement.
Now is the time to have an agreement down on paper and stamped so that we know exactly what is involved. We can then move on to other discussions. It is only when we meet people like the witnesses, read their comments and see more that we ask ourselves how this is going to work. Nobody can answer that because we have never been given an answer. The most worrying thing is that if one watches the BBC which I and, I am sure, others do, the information given depends on who is being interviewed. Some people have a different version of the Irish agreement. There was a side comment that things have not been fully agreed. What has been agreed? That is what I want to know.
I am delighted that we have had an opportunity to hear the views of the witnesses. The more we talk to people like them and listen and understand, the more we realise how important it is to have an organisation like theirs and others, and start listening, focusing and looking for an agreement on paper long before 2019 or 2020 so that there are no ifs, ands or buts. Nobody has been able to answer the questions I have posed. I thank the witnesses.
Part of the difficulty with the conversation about the divergent views of the British political establishment is that it is going in different directions and no one seems to know what is happening or how to deal with the situation.
The simplest way forward would be if the UK stayed in the Single Market and the customs union. The British Irish Chamber of Commerce has called for a new customs arrangement. Is that to try to sell it to those who are blatantly opposed to being involved in the whole European project? Is this some way to try to move them along the road? Clearly, there is no agreement. The Brexiteers want to leave the Single Market and customs union and that creates major problems for those of us in Ireland. Our party has been involved in the referendum against Brexit.
The chamber deals with this to some extent in the paper and states that the organisation has repeatedly stated its concern for the island of Ireland and the Good Friday Agreement due to Brexit. Given that the majority of people in the North of Ireland voted to remain in the EU – the figure was 56% - does the chamber believe this vote must be respected? Does the chamber believe a deal should be done to grant some sort of special arrangement - we use the term "special status" - to remain in the EU? Does the chamber have a view on that?
The representatives of the British Irish Chamber of Commerce have said that the Good Friday Agreement should be protected. Do they agree that it should be protected in full? I am asking because they have also said that there needs to be an alternative model to the European Court of Justice for dispute settlement.
The right of Irish and British citizens to redress currently in the European courts is underpinned by the Good Friday Agreement. Having such rights dealt with only at British court level would be in direct violation of that underpinning.
The trade dispute mechanism and other EU trade deals, such as TTIP and CETA, are private so-called investor-state dispute settlement models. They allow and facilitate private companies to sue governments. They are nothing compared to the scope and power of the European Court of Justice and protections under EU law. The removal of the ability of citizens to get redress at the European Court of Justice violates the terms and essence of the Good Friday Agreement. Anyway, perhaps I have read incorrectly what the chamber seems to be suggesting.
Do the chamber representatives agree that we should try to protect the enabling legislation, including the UK's Northern Ireland Act 1998, which put the Good Friday Agreement into domestic law within the EU legal framework, rather than trying to create a bespoke or different legal framework purely for private companies?
The chamber document also states that Britain should be able to set its own migration policy. Under the Good Friday Agreement, citizens of the North of Ireland are Irish citizens and British citizens. The same applies to those born in the North or those who have had permanent residence there for more than five years. If the British Government drastically changes this migration policy – as some among the political establishment are suggesting – and removes the right of these people to remain and work in the North, it amounts to a violation of the Good Friday Agreement. That would deeply affect the economy and the social fabric of many communities there. Is that a matter of concern for the chamber and its members?
There is another difficult part of this equation. The British are leaving, but they are not saying what they want. It is reasonable for us to ask what they want. They are not very clear in articulating exactly what they want. I believe the current arrangement, including the customs union and the Single Market, would be the best deal for Ireland. The chamber seems to be moving away from that position. Is the chamber simply dealing with the reality by saying that the UK will pull out and that is simply part of the viewpoint coming from Britain? Is this seen as a way of softening the complete separation that some Brexiteers are proposing?
I apologise for being late. The chamber representatives are welcome. I was at another meeting and got held up.
I come from a border constituency, namely Sligo-Leitrim. There are major concerns along the Border. You have highlighted over many months, Chairman, the concerns of the farming community and those involved in tourism, trade and other activities between North and South, between Northern Ireland and the South. It is vital. There are major concerns in my constituency and throughout all Border areas over what will happen.
The more people I talk to, the more confusing it becomes because no one seems to know exactly what is happening. If no hard border was established on the island of Ireland, would this plan necessitate some sort of hard border between all areas of the island of Ireland and the rest of the British Isles to enforce the UK's non-acceptance of the EU freedom of movement policy? These are among the concerns. Let us suppose the UK seeks to remove the ability of non-citizens to move freely inside its borders. How can that plan eliminate the need for some sort of hard border on the island of Ireland? The majority of the people and the population here are not part of the UK.
These are issues and concerns that I have and I know my constituents share them. Generally, within this country at present there is so much uncertainty and news coming out. One day we hear something. Then, the next day, what was said is contradicted and so on. That causes major concern for many people.
Most of my questions have been asked already. I thank Mr. O'Neill for his comprehensive report. One thing that struck me was the remark about 200,000 jobs arising from English companies here and, vice versa, from the Irish in England. That has to be critical to all those companies. What are those companies doing about it? What exactly do we know about what has been agreed on the Border? There was supposed to be an agreement before Christmas. That is really what I would like to find out.
Mr. Eoin O'Neill:
I wish to pick up on some of the questions. I thank Deputy Seán Barrett for his kind words and offer of support. We will take any support we can get. We take it from all quarters and we receive significant support throughout the full spectrum.
Deputy Crowe asked us to put our position clearly on the table. The British Irish Chamber of Commerce advocated strongly for a remain agenda throughout the campaign. We campaigned in the UK for a remain agenda. We tried to mobilise the voice of business, which was a difficult voice to mobilise in the UK in the course of the campaign. We were ardent supporters of a remain agenda because we did not see any positive future in the UK exiting, either for the UK or for the rest of Europe. I wish to make that point in case there is any ambiguity. That was strongly our view.
Our absolute understanding is like the understanding of everyone else. We understand the border agenda is as defined in articles 49 and 50 of the joint report, that is to say, that there will be an open border relationship North and South. However, as that infamous week went on, we went from having 49 articles to 50 articles following an intervention from the North. We moved to not having an east-west border either, because there was some sub-text of a border going down the middle of the Irish Sea. Last week I met a delegation of members from the Scottish Parliament. They were equally concerned about what a border down the middle of the Irish Sea might look like given the question of where it would leave Scotland.
As we start to peel the onion, we get different layers evolving in all aspects of it. I absolutely understand the concerns expressed about a gateway concept and Ireland. It is a result of a vote we did not have. The result was foisted upon us and has resulted in us becoming a gateway to Europe. That will put an extraordinary and onerous responsibility on the Irish sovereign State to protect and manage its borders as an entry point into the European entity. I do not think that has been addressed but it needs to be addressed in far more detail in the context of the argument on where we might go.
We have tried to call out strongly where we believe the decision of the sovereign vote in the UK has led. We respect the vote of the UK. We could parcel it and say that Scotland voted to stay, Wales voted to leave and Northern Ireland voted to stay. The city of London voted to stay. We could start to parcel it but at the end of the day the sovereign entity voted to leave Europe and we have to respect the vote of the people. The British Irish Chamber of Commerce is a democratically-driven organisation and we respect that vote.
We cannot start to parcel down elements of it, much and all as we might like to. Against that backdrop, what we have tried to do in our Big Principles document is present a palatable way forward for that electorate to make the best of a difficult situation.
I did not really address it earlier when Deputy O'Sullivan asked me where we could find some positives and opportunities in this. Let us be absolutely clear that there are no positives. There are positives in what we have today, which has been positive for us for many years on this island, but there are no positives in this going forward. The best we can hope for is a nil-sum game which is difficult and challenging in its own respect. We are not blind to the issues and we absolutely respect that.
I will allow Ms Daughen to speak on some of the cases of the Court of Justice of the European Union. There is a lot of technical stuff in it.
Ms Katie Daughen:
To build on some of the points made about the Ireland gateway to the EU and how we would see this working in terms of the borderless movement of people on the island of Ireland and into the UK, there would have to be more stringent controls within the UK on its access to services and checks would have to take place. There would still be the usual passport checks. As the UK and Ireland are outside the Schengen Agreement, there is removability from it. There would be more focus on access to services, national insurance numbers and the right to work etc. This is where we would see a lot of that control in terms of the UK setting its own migration policy.
Deputy Crowe's question also related to the migration stream. If UK migration policy does get more stringent, the common travel area is being protected by the statements and commitments in the joint report. This refers back to the Ireland Act 1949 in the UK which confers rights on Irish citizens on a pretty much equal basis to those born in the UK. This means that an Irish citizen today can move there and have more expansive rights than someone from, say, France or Germany. For example, I can vote in its national elections. We think that Northern Irish citizens who might identify as Irish will be covered through that and migration policy will not impact on them or their rights. It is interesting to note that the UK's guidelines for citizens of Europe excludes Irish citizens as they are being treated separately due to the common travel area.
On the Court of Justice issue, the EU has international dispute resolution mechanisms with other trading countries that are above what was described about CETA and TTIP. The EFTA court is a prime example. We have not been particularly prescriptive because it is a matter for negotiation but we point to the EFTA court and suggest that this could almost be an add-on to it. What we are proposing could be overseen or it could be some kind of mirroring of it. There are also other mechanisms such as that in the EU-South Korea free trade agreement although generally we are talking about trade when we are talking about international dispute resolution mechanisms.
Northern Ireland and UK citizens will still have recourse to the European Court of Human Rights because that is completely separate to EU membership. This would cover the conditions put forward in the Good Friday Agreement.
Deputy Barrett asked about Ireland losing its influence. It is important to note that even in phase 2 Ireland remains a distinct strand of the negotiations. This means that Ireland has some influence on what the overall outcome will be and this is a clear recognition of the diplomatic work done by Irish officials across Europe and the understanding within Brussels of the Irish-specific situation. While the focus will change, Ireland still has a strong voice within the negotiations.
In terms of what has been agreed on the Border, I suppose nothing has been agreed. The joint report is a political commitment and there is no legal underpinning to it but Michel Barnier has been clear that he wants to provide that legal underpinning as soon as possible and it will form part of the withdrawal agreement. This covers a totality of issues including EU citizen rights and the withdrawal bill. It is important, therefore, that it is given some legal underpinning. Hopefully, it will be done by October in terms of allowing for the timelines for ratification etc.
Mr. Eoin O'Neill:
To finish up on those points, the Irish Government is currently running with two key initiatives that we support strongly. One is the initiative of the Minister of State, Deputy Helen McEntee, on the future strategy of Europe. We consider that an integral part of the debate and one which needs to be brought into it. To refer to Deputy Barrett's point earlier, it allows us to create a strong voice in that space on our role in Europe and we would be very supportive of it. We are also mindful that when this will be over, whatever way it finishes, we must have a sustained and long-term working relationship with the UK. It is our biggest single market and where a significant number of Irish people live and ply their trade on a daily basis. The air corridor between Dublin and London is the second busiest in the world. We send the equivalent of the full population of Wembley Stadium to London on a plane once a week. The reality is that this will continue and business will continue to transact. What the working relationship looks like will be hugely important and the chamber will play an integral role in that discussion, too.
I do not think that there is any problem in terms of relationships between business groups such as the chamber and others. People will go about their daily business. The real problem is what the regulations, rules and laws will say on entry into the EU. I do not say this with disrespect to those doing the negotiations but my continuing difficulty is that we need to have an ongoing and strong input. We are talking about members of the European Commission who are not representing member states as such but negotiating as commission members. The sort of problems that we have just spoken about are national issues for us and they are not just selfish national issues but issues that are imposing an obligation on us without people thinking through how they will support us as the only land entry into Europe. That is very much the issue. All the other stuff is grand but, whether we like it or not, we will be the only land entry into Europe and that imposes huge obligations on us and in relation to Northern Ireland and so on. That type of input seems to be missing. We hear all sorts of other things being debated and discussed but we need to have very close contact with those who are negotiating to keep these issues upfront. That is the point I was trying to get across.
I apologise for missing some of the session. I was attending a conference as part of events commemorating the centenary of women suffrage. I am happy to say that it is very much being done in collaboration with our colleagues in Britain.
On St. Brigid's Day. I thank the Deputy for that. This morning we have a speaker from the House of Commons who is running its centenary programme for women suffrage.
I apologise if someone has picked up on it already but I listened with great interest to what Mr. O'Neill said about there being no positives. From some of the events concerning Brexit which I have attended in recent months, the only positive note that seemed to be struck was struck from an academic setting or context. In particular, researchers from Science Foundation Ireland and others commented that there may be a positive spin-off in terms of attracting academic researchers who see that with Brexit they will lose the potential for collaboration and, in particular, European research grants. We may be able to attract them here. Will Mr. O'Neill comment on that from the perspective of the chamber of commerce? Is there potential there in terms of a research and development environment from a commerce point of view?
Mr. Eoin O'Neill:
There are pluses and minuses within sectors but, overall, if I had a choice, I would prefer, for clarity purposes, to stay where I was rather than where I might be going.
Undoubtedly there is about £1 billion a year of research funding that goes into the UK that potentially will come out of the UK in the context of Brexit. That is particularly focused on research and development functions and supports at third level. I am not 100% sure of this statistic but my colleague Ms Katie Daughen might comment, that roughly about 25% of academics in the United Kingdom come from outside the common travel area. Straight away there are issues in terms of the potential academics going to work in the university sector but also the research work they do and in many respects, the money follows the academics, not the other way. There is an opportunity within that sector. I contend strongly that there is an opportunity for Irish universities to partner with UK universities to actually build a constructive future for themselves to be an European base and UK base, because the United Kingdom will still be a source of a significant amount of funding in the context of that. Our patron, Mr. Niall FitzGerald, the former chairman of Unilever and other companies across the UK who many will know is a man of strong Irish conviction and Munster rugby conviction is a very strong proponent of this idea that the UK universities, in his role as the chair of the Leverhulme Trust, will support each other and in that context will seek European support. I think English speaking universities in Ireland are a natural home for that space. The British Irish Chamber of Commerce has an education committee and an education group chaired by-----
Ms Katie Daughen:
To build on what Mr. O'Neill said, the education committee has actually published a paper, which looks at future collaboration between the UK and Ireland and many of those who were mentioned this morning sit on that committee also. In the paper, we state we would like to see the UK retain access to some of those programmes such as Horizon 2020, but we are very explicit that in those terms it would have to be done under certain conditions, so it might be that they have to maintain the freedom of movement for academics or that there would be a fee associated with that. From our dealings with UK universities, we think that is something that is very positive and is something that they would want to see and have been vocal about. Horizon 2020 has shown the absolute best of what can happen with collaboration across the European Union. It will be a loss to the next programme to replace it, if the UK universities are lost from that programme, given that they are the leading universities in the world.
Mr. Eoin O'Neill:
Last week we ran an evening for 170 younger Irish business leaders in the UK under the banner, Ireland is Open for Business, not about Brexit, with significant support from the Irish Ambassador, HE Mr. Adrian O'Neill, who hosted the evening for us. One of the universal facts was the strength of the Erasmus programme. Fondly remembered on the night was the late, Peter Sutherland, for his support of that programme. He was remembered from the floor on that night because many in the room had availed of the Erasmus programme and how it had opened up their opportunity to go travelling, to work and to learn and experience. Their final point is that many had landed in the UK but after sojourns to places like Rome, Paris, Berlin and it all kicked off from the Erasmus programme, which I think underpins the strength of that historical relationship.
I was in London on Thursday night, hosted by HE Mr. O'Neill in the Irish Embassy at an event with 100 lawyers, under the London Irish Lawyers Associations. There is a significant number of lawyers, leading in their profession, with Irish connections either first or second generation Irish, many of whom, as Mr. O'Neill has said, have ended up in Britain after travelling abroad.
I thank Senator Bacik. I have a question that is likely to come up in the Chamber, so with the agreement of the committee I ask Deputy Darragh O'Brien to take the Chair, because Deputy O'Sullivan has a question at the same time. Is that agreed? Agreed.
I had indicated that I was going to ask a question. Mr. O'Neill stated that the UK looks for the ability to set out its own migration policy. That is something that Mr. O'Neill has dealt with in his own paper. Freedom of movement is one of the four freedoms of the European Union and it is a crucially important freedom. I would not want, and I do not think that any members, as EU citizens, would want that provision to be watered down by way of a deal. I was struck in particular by the British Prime Minister's comments in China yesterday when she spoke about their being a different level of access for EU citizens post the transition period. I think that is a most unhelpful remark by her and is probably or may be playing towards the hard wing of her party, particularly over the political differences that have come to the fore in the past week. In advance of the phase two negotiations that seems to be hardening of that stance. I would not accept both as a Member of the Oireachtas and an EU citizen that we could enter into an arrangement that would effectively mean we will allow Britain to restrict the freedom of movement of EU citizens because of any deal we would do with it. Immigration and migration was the issue, not global Britain. A person in Sunderland was not worried about Britain increasing its trade with China. Again, Mr O'Neill is asking how we square that circle.
Both Mr. O'Neill and Ms Daughen have consistently and rightly mentioned that although the UK is our number one trading partner we have diversified greatly and are not nearly as reliant on trade with Britain, but do they remind the British as well that we are their fifth biggest market and that we run a trade deficit with the British too? I have been at pains to remind colleagues in Britain and some are astonished at that fact. I watched Boris Johnson last year berating an audience in India, saying that the UK was doing more trade with Ireland than they were with India but that is a reality. How do British business and politics react to that? We need to rebalance that. We need to have a position to come out as a partner and not as a junior partner, in that we need them but they also need us.
I will leave it at that, but there are so many other points we could raise. I thank Mr. O'Neill and Ms Daughen.
Ms Katie Daughen:
In terms of the EU citizens' Single Market freedom of movement, what we are proposing would see the UK remove itself from the Single Market. That is not because we think it is the best for business. We think the absolute best outcome for business would be for the UK to remain in the Single Market and the customs union, but politically we do not believe that is achievable at present, which is why we are putting forward the best Plan B, which is what our big principles proposal really is.
We agree that the movement of people is by far the most politically sensitive issue within the UK. What we are proposing in terms of the customs arrangement largely relies on the trade of goods and we are seeing the UK can set its own migration policy within limits. We are also proposing that it be coupled with a comprehensive deal on services.
The more the UK wants to have alignment with the EU on services and trade into the EU, the more there will be conditions around that mainly to do with the movement of people. If one is selling a service into a different market, one needs to be able to travel there to sell that service. Likewise things such as the future Framework Programme 9 that will replace Horizon 2020 will also rely on whether the UK wants to remain party to the movement of academics and so on. It will be down to how much the UK wants access to services. If one looks at CETA, which is by far the most comprehensive deal the EU has signed with a non-European country, the trade and services covered in it are quite limited but it does allow for some procurement and investment and things like that which would allow people selling those services to travel. At the other end of the spectrum is the Deep and Comprehensive Free Trade Area, DCFTA, that the EU has with Georgia, the Republic of Moldova and Ukraine, that is done through the adoption of the EU acquis. There are models that are not fully reliant on the freedom of movement. We do not think the UK would probably get that, given that this is seen as more towards accession rather than leaving. There are models that can be worked with. From a business perspective there are labour needs in the UK that are currently being filled by EU citizens. I think Scotland, especially, has serious concerns because of the demographics around its workforce. We will advocate as this is such a strong issue and politically sensitive one.
The UK can have control over freedom of movement. Much of that will depend on what deal is struck on services as well. Outside that we will advocate strongly to the UK Government in its own domestic migration services to ensure that businesses that need access to labour get it. There are other ways around it, but we cannot ignore the fact that this is a hugely politically sensitive issue in the UK. That is why it is factored into our proposals.
Mr. Eoin O'Neill:
I wish to pick up on Deputy O'Brien's point about trade. Do we hammer home the view that it is an equal partnership effectively, whether we are first and they are fifth or whichever way we want it to pan it out? The sums stack up. We feed the UK. This country feeds large portions of the UK. There is not a sandwich made in the UK in which the raw ingredients do not come from this country. That is the reality. The majority of meat on Tesco shelves comes from this country. That is grade 1 meat. It is high-end, high-quality, stamped and certified. It has all of those positives about it.
Not only do we remind them that the supply chain is built from here, but it is a quality supply chain, one that has stood the test of time and one which we can stand over with pride. We are Irish people who operate in the UK market and talk to UK audiences. As Irish people, we are very proud to stand over that and we constantly remind them of that. We constantly remind them that in any future arrangements they may have, that degree of quality may not be present in their supply chain. In that context we think it is very important to fly that flag.
We have also been responsible for bringing UK businesses to Ireland and talking to them about the opportunity of us being English-speaking with similar legal structures, and no taxation barriers to import and export. Last year I was involved in meeting a trade mission from the Northern Powerhouse which came to Dublin. It involved small businesses looking for an opportunity to trade into Dublin. It gave us the opportunity to showcase Ireland as well; so it is a two-way partnership approach.
It is very important for us to consistently remind people in the UK about this country, that ar scath a chéile a mhairimid. We have worked in each other's shadow for many years, particularly in the supply of goods. We have been a hugely integral part of the supply chain and one which we can stand over with pride.