Oireachtas Joint and Select Committees
Wednesday, 24 November 2021
Seanad Committee on the Withdrawal of the United Kingdom from the European Union
Update on Withdrawal Agreement, Protocol on Ireland and Northern Ireland and Trade and Co-operation Agreement: Minister for Foreign Affairs
The agenda for today's meeting is an update on the withdrawal agreement, the protocol on Ireland and Northern Ireland and on the EU-UK Trade and Cooperation Agreement, TCA. Our witnesses today are Minister for Foreign Affairs, Deputy Simon Coveney, and officials from his Department. I welcome the Minister to the committee and thank him for his time.
Bear with me as I run through the note on privilege that is required at the start of the meeting. Witnesses giving evidence from within the parliamentary precincts are protected by absolute privilege in respect of evidence that they give to this committee. This means they have a full defence in any defamation action for anything said at the committee meeting. However, they are expected not to abuse this privilege and may be directed to cease giving evidence on an issue at the Chair's direction. Witnesses should follow the direction of the Chair in this regard. I remind them of the long-standing parliamentary practice to the effect that, as is reasonable, no adverse commentary should be made against an identifiable third party or entity.
I remind members of the long-standing parliamentary practice to the effect that they should not comment on or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. I also remind members that they are only allowed to participate in this meeting if they are physically located on the Leinster House complex. I ask all members, prior to making their contribution to the meeting, to confirm that they are on the Leinster House complex. If they are directed to cease giving evidence by the Chair in relation to a particular matter, please respect that direction.
The Minister, Deputy Coveney, is accompanied by Mr. Karl Gardner, director of Brexit preparedness at the Department of Foreign Affairs; and by Ms Maeve Collins, director general of EU division at the Department of Foreign Affairs.
The Minister and his officials are most welcome. I invite the Minister to make his opening statement.
I thank the Chairman for the opportunity to return to the Seanad special committee. I thank members for their work and the excellent interim report they have produced. I look forward to the publication of the final report later this year.
I thank the various witnesses who have shared their perspectives with the committee. The committee provides an important platform for voices from across politics, business, community groups and civil society. Continued engagement from across these spheres illustrates just how relevant and important the outworking of Brexit remains for all of us.
Almost 12 months ago, we welcomed the finalisation of the EU-UK Trade and Cooperation Agreement, TCA. This was the final element in a sequence of agreements negotiated to allow the orderly withdrawal of the United Kingdom from the EU and underpin the framework for future relations. Since then, the work of the joint implementation bodies under the agreement has begun. In June, we saw the first meeting of the partnership council of the TCA and its subsidiary bodies continue to meet, including, for example, the trade partnership committee which met on 15 November.
The TCA, like the withdrawal agreement, was jointly agreed by the EU and the UK. Through its joint implementation, we want to maximise the opportunities presented by the TCA. We want to see the future relationship with the UK develop positively. To achieve this the parties must work together in a spirit of partnership and trust. When trust is compromised, progress is threatened. The recent UK approach to the protocol has, unfortunately, called that trust into question. I believe, however, that there is an opportunity before us now to seize momentum towards agreeing a constructive way forward through compromise and partnership on the protocol.
The EU has an unwavering commitment to the people of Northern Ireland and the implementation of the protocol. Commission Vice-President Šefovi has repeatedly stated, including before this committee, that the Union's number one priority remains to ensure that the Good Friday Agreement is protected, a hard border on the island of Ireland is avoided and the integrity of the EU Single Market is maintained.
In October, following extensive engagement with Northern Irish stakeholders, from political leaders to businesses and a cross-section of civic society, the Commission published a package of proposals setting out creative and practical solutions designed to help Northern Ireland deal with the consequences of Brexit. These non-papers cover the issues of customs, sanitary and phytosanitary, or SPS, medicines, and improving engagement with Northern Irish stakeholders and authorities. Since their publication, the EU has been in dialogue with the UK with the ambition of achieving agreed solutions that can ensure greater stability and certainty for people and businesses in Northern Ireland.
I remain in close and regular contact with Vice-President Šefovi and we met last week. He remains committed to finding credible and durable solutions for the genuine concerns raised with him by people and businesses in Northern Ireland. Last week, I also met Lord Frost and reiterated the need to engage constructively in this process, grasp the current window of opportunity and agree a deal that can address the real-world concerns of people in Northern Ireland.
I believe the remaining issues can be resolved. However, to do so, we need to get to a much more positive, stable and trusting EU-UK relationship. We have some way to go to get there. I assure the House that the Government will not stop doing all it can to help develop, support and sustain such a relationship in the interests of all of the people on this island. I look forward to members' questions and comments.
Thank you for bearing with us. There was a vote in the Seanad, so we had to suspend.
The Minister had finished making his opening remarks just as we concluded. I will open the meeting to members. We will have a question and answer session. I call Senator Lombard.
I acknowledge the Minister's opening statement. I listened to it in my room due to the Covid regulations. The whole issue of Brexit and where we will go and how we will move forward in the next few months is important. How will this affect the agricultural community, in particular? I mention the origin of Irish products and how Irish products could be affected by any disruption of trade. Some 40% of the North's milk comes South to be processed. How will that be looked at in the long term regarding the Brexit negotiations? It is a significant issue for an industry that is worth €19 billion to the economy. That would be the all-Ireland milk processing potential we have. It is one of the major drivers in the economy. How will we work with the companies involved in cross-Border activity regarding the processing of milk products? How can that be looked at going forward and how will that be affected?
Can the Minister update us on how the ports have handled themselves over the last six months, including on tariffs and the implications of and the work that is required to get through the port network? A significant amount of product now goes directly to the Continent, which is a step forward, but there is still a major proportion using the land bridge through the UK. Where is that process at the moment? What are the failings and positives regarding how we could appropriately manage those issues?
The last issue has to do with cross-Border healthcare and how it could be, or is, affected by Brexit. There is an issue regarding the cross-Border directive that allows for patients to go to a European Union country and this has been slightly changed regarding Northern Ireland and how that fits in. There was a temporary situation put in place last year for it. Can the Minister update us on where that issue will go? It is a significant issue for many people, particularly in the northern half of Ireland but even in my own constituency as well, who would avail of the scheme. How will that scheme work its way through the system so we can have an appropriate scheme where people can get cross-Border healthcare?
Let me start in reverse. First of all, it is welcome that the Northern Ireland planned healthcare scheme and transition cross-Border directive arrangements have been successfully in operation since 1 January. Both these measures continue to ensure that patients have access to healthcare in Northern Ireland and, in limited circumstances, the UK. While the scheme has been operating on an administrative basis to date, the Government intends to place the scheme on a statutory basis. An extensive examination of options to inform the drafting of the general scheme is currently being undertaken by officials in the Department of Health, and that work continues at pace. Effectively, there has been an ad hocarrangement in place since 1 January, but we will put that on a statutory footing and the Department of Health is looking to finalise how to do that.
On ports, it might be good to put a number of things on the record. Initial difficulties in adjusting to the new trading environment have largely settled. The vast majority of goods movements are now green-routed, which means they are not checked at all and are permitted to leave the port without any interaction with customs or the other regulatory authorities. Well over 80% of goods are green-routed now. Revenue, the Department of Agriculture, Food and Marine and the HSE Environmental Health Service are actively working together to streamline processes and reduce the administrative burden for traders as much as they can, while continuing to meet our obligations under EU law. Work is under way to improve inter-agency communication, increase data sharing and reduce duplication and to streamline processes as much as possible while ensuring that the necessary controls are performed.
The committee raised the issue in its interim report, in that it wanted State agencies to effectively be in one location in ports. To be fair, they are trying to do as much of that as they can. There have been a number of developments since the start of the year and further developments are intended to address the key requests of traders. For example, a key request from trade was to provide an interface that allowed system-to-system communications between traders, customs systems, and the Revenue RoRo system. This has been delivered and has removed some of the manual work involved in completing the pre-boarding notification. There are limits to what can be done in terms of co-location of authorities at ports. At Dublin Port, for example, there are space and layout limitations. In addition, certain checks such as animal health checks or food safety checks may require dedicated infrastructure to ensure that such checks can be safely undertaken, like stables in Dublin Port, for example. That said, the agencies continue to work together to identify ways in which the passage of trucks through Dublin Port, in particular, can be streamlined.Since the start of the year we have seen a very significant increase in the traffic from Dublin and Rosslare directly to mainland Europe, into France, Belgium and the Netherlands.
We have seen quite a significant reduction in the use of the land bridge, but also quite an increase in UK-Northern Ireland trade, with product coming in through Larne and Belfast. A significant amount of Northern Ireland product would previously have come through Dublin. Approximately 40% of product coming into Northern Ireland from Great Britain would have come through Dublin Port, and some of that has now been diverted directly into Larne and Belfast.
There has been a dramatic shift to direct ferry routes. There are about 36 direct ferry routes a week now. That figure would have been less than a dozen this time last year, so it happened in the space of a short period of time. We had conversations about whether the State needed to subsidise direct routes and our response to that was that we believed the market would respond. If you subsidise it, you could undermine market forces in terms of the viability of that. To be fair, the advice from the shipping companies was not to subsidise these routes. If it makes sense to do it from a commercial perspective, it will happen anyway. That is exactly what has happened, and it continues to grow. If anything, we are investing in port infrastructure in mainland Europe to streamline a number of those routes. The Minister of State with responsibility for European affairs, Deputy Thomas Byrne, has visited a number of those ports in relation to the investment that is taking place. The port infrastructure story is a positive one. While there much focus in Northern Ireland on the problems in terms of checks and goods coming in from Great Britain, the ports in the South have just got on with making the changes and trying to make it work, and some of the supply chains have changed accordingly.
In terms of an update on agriculture and on Brexit in general, having a trade and co-operation agreement, TCA, in place is hugely important for agriculture. A big part of our agricultural trade is with Britain, but a big part of Britain's food trade comes to Ireland as well. It is an €8 billion trading relationship back and forth across the Irish sea. It sells much food to us. It is not quite as much as we sell to them, but it is still a very significant figure. Therefore, avoiding tariffs on that trade with a TCA was, and is, hugely important.
In terms of the protocol, anyone in the food industry in Northern Ireland, and certainly the agricultural industry in Northern Ireland, recognises the value of the protocol. Whether you are nationalist or unionist, the capacity for seamless all-island trade in terms of the food industry is really important, and the protocol guarantees that. However, one of the problems with that has been the country of origin rules. What was clear through the Brexit debates was that even though the protocol effectively extends the EU Single Market for goods to Northern Ireland, de facto, the country of origin issues were not solved by that. If a dairy product is produced in Northern Ireland, it is Northern Ireland product. It is not EU origin. Even though it is produced to EU standards and it is produced within the EU Single Market, it is not EU origin. This has allowed that product to be sold into the EU Single Market seamlessly. However, if the product is going to take advantage of EU trade agreements with other parts of the world, because it is not origin EU but origin UK, that creates a difficulty.
I have been raising this issue for three years. We wanted to try to get it resolved in the Brexit negotiations but it was not possible to do that. There was not a big ask from the UK Government to solve this issue. Many dairy processors, such as Lakeland Dairies, source a significant portion of their raw material from farmers in Northern Ireland. That is really important for Northern Ireland agriculture. I would like to see a situation where the EU works to accommodate Northern Ireland produced product in future trade agreements and to look at whether it is possible to amend existing trade agreements to facilitate Northern Ireland product being considered as EU product of origin, because it is EU standard. Therefore, if we are going to have Northern Ireland as part of an extended EU Single Market for goods, then one of the upsides of that is to benefit from EU trade agreements in terms of origin. We have to find a way of doing that that does not undermine the UK origin as well, in terms of potential future UK trade agreements for product produced in Northern Ireland. That is tricky and it has not been solved yet.
The truth is that it has not been that disruptive to the dairy industry. Dairy prices are strong at the moment. Senator Lombard and other dairy farmers will know that. That has not been a big issue yet because there has been a strong demand for dairy products across the EU Single Market. This will only become an issue if you are relying on that product, or mixed pools from North and South, being sold under EU trade agreements to other parts of the world. Companies have managed that in a clever enough way so far, and it certainly has not undermined price or market access so far. However, it is something that the dairy industry would like to have resolved. It is not just dairy; it is other product as well, including beef, sheep meat, poultry product or whatever. We import a lot of poultry product across the Border from Moy Park and others.
It would be useful if we could facilitate a sort of dual labelling, if you like. If a product is produced to EU standards, it should, therefore, be seen as part of the EU system, but of course it is UK product and should, therefore, be facilitated as UK product in the future as well. That is a tricky issue that is not resolved yet. If we can get the protocol settled in terms of its implementation on the basics through the negotiations between the Šefovi and Frost teams, then hopefully, through partnership, we might be able to find ways of dealing with that country of origin issue over time. Luckily, for now, dairy prices are strong so the industry has managed to cope with that country of origin issue, from what I have heard. It is not an anomaly; it is a real issue. This could be problematic if there were an oversupply of dairy product in the EU and people were looking to rely much more on access through trade agreements and so on. Those are the long answers to three short questions.
We lost a lot of time with the vote. Therefore, if the Minister consents, I might bring in two members at a time to make sure that we get everyone in. The next speaker is Senator Wall, followed by Senator Gallagher. We cannot hear Senator Wall, so we will come back to him in a second. I call Senator Gallagher.
Senators, if you can hear me and if it is possible, please make your way to the committee room to ask your question. That would be appreciated. We think it is an issue with the committee room and not your computers. I will call Senator McDowell and come back to Senators Wall and Gallagher.
I apologise for my late arrival, I was getting my booster jab, which I decided was important. I understand you were discussing the House of Lords letter before I arrived. It raises some very interesting questions about pharmaceuticals, medicines, licensing and the like. Are we running into any difficulties with British medicines imports in the Republic? Is it causing any difficulty at our ports and for our health system? Boots operates in the South as well as the North.
Is it suffering difficulties? Are we aware of that and has any of that come to our attention? It cannot be only a Northern problem. We must be having some problems too, certainly in relation to over-the-counter products. Many of them used to be made in Britain, and a lot of British products are available in Ireland. On pharmaceutical and quasi-pharmaceutical products, there are chains like Boots functioning in both jurisdictions. Are we suffering problems that are different from those being encountered in Northern Ireland? Would the outcome of the current negotiations, including the possibility of arriving at some middle-ground solution, have any implications for us in this State?
First of all, the problem in Northern Ireland is not as feared. Certainly, there is a fear that certain drugs may not be able to get into Northern Ireland because they are certified in Great Britain and that certification would not be recognised by the EU, and therefore that product coming into the EU Single Market for goods would be problematic because it is not certified by the EU. Vice-President Šefovi has committed to a proposal that would resolve that issue. In fact, it very much mirrors a UK paper that was presented to the Commission in March, and that is effectively the basis for the solution the EU wants to provide. It will effectively change EU law to recognise UK certification for Northern Ireland, therefore guaranteeing a seamless supply of medicines into Northern Ireland. There has been much talk about that.
My understanding is that as of yet there has not been a significant shortage of medicines in Northern Ireland, but that was a fear that could develop. This was a big fear about a year out from when Brexit was likely to take effect. There was quite a lot of discussion with the pharmaceutical industry on this issue. It was not just about human medicines, but it was about veterinary and animal medicines as well. To date, there has not been a shortage. I have yet to see empty shelves in any Boots stores. There is one across from my office in Carrigaline, in my constituency. This has not been an issue.
The solution the EU is putting together is a solution for Northern Ireland, not for the EU as a whole. What we are seeing is the industry responding by altering its supply chains. There may be some changes in some brands and the use of generic drugs in terms of certain types of drugs and so on, but I am not aware of any concern or panic in the industry that this will lead to a shortage of drugs here. It has had quite a long lead in time to be able to change supply chains and to ensure EU certification. I will ask Mr. Karl Gardner to comment on that, but that is my understanding.
Before Mr. Gardner comments on that, I will ask a supplementary question on this. Is there any difficulty for Irish pharmaceutical manufacturers selling into the UK market? This should be considered at the same time if we are going to have a common branding for Northern Ireland. There is a possible risk that people might transpose their manufacture to Northern Ireland to avail of the best of both worlds.
I met the pharmaceutical industry on multiple occasions during the endless Brexit negotiations, and many companies have spent much money restructuring their footprints in Ireland and the UK. If you take my constituency, for example, which probably has the second largest cluster of pharmaceuticals in the EU, all the big brands are there and nearly all of those companies have a big footprint in the UK as well. The manufacturing systems effectively relied on Ireland and the UK seamlessly interacting on ingredients, packaging and research and development programmes and so on. Some of that was restructured recognising the likely outcome of Brexit and ensuring that products being produced for the EU market were being finished in the EU. Every company is different, but that is my understanding of what many of them have done.
I am not aware that the UK is looking to ban EU certified medicines coming into the UK. However, the reverse is not the same. Within the EU, because of its size and scale, it essentially does not recognise approval bodies from third countries. I would be very surprised if the UK were to reciprocate and only to be able to access medicines that are certified in the UK. Maybe I will ask Mr. Gardner to come in to make sure what I said is accurate.
Mr. Karl Gardner:
On the first point, as the Minister said, in the run up to 2020 much work was done to make sure suppliers and providers engaged with the Department of Health and the people undertaking various exercises on the supply chains. One area we are working with the Commission on is to ensure continued market access to what they call the small member states of Cyprus, Malta and Ireland and which are English speaking small member states. It does not want any fallout from any impact the hubbing and the warehousing of products would have in the UK. As we saw with a number of issues, goods are brought in and dealt with in the UK and then are redistributed. That is an area we are working with the Commission on and it is well aware of it and it is in train.
At the start of the year breakfast cereals were coming in that were produced in Spain and that then went to a redistribution centre I think in Liverpool in the UK. That redistribution centre covered the UK and Ireland. They were not even re-boxed; they were just redistributed from the UK. They then became stateless in terms of origin because they came from the UK into Ireland.
Correct. They could not be treated as UK product because they originated in EU. Those redistribution centres have had to change their systems quite fundamentally. Many retailers in Ireland now access directly through hubs in France, the Netherlands, Germany and so on. However, it is not as easy to do that for medicines. It is not like a box of corn flakes.
So it should be, because we are much better off with the protocol than without it. There are many more upsides than downsides to the protocol. All of the political focus has been on the negative, in terms of the number of checks required, the limitations and the chilled meat issue, which became sort of an identity issue of British sausages coming into Northern Ireland. More and more people are starting to look the positives. When you speak to business leaders, they are very clear on two things. First, they think the protocol needs to stay, but we have got to make it work a bit better and, second, they do not want Article 16 triggered because they think that is going to have a knock-on consequence in terms of the trade and co-operation agreement, TCA. The ask that I get from Northern Ireland, apart from some unionist political leaders, but certainly from business leaders, is that the protocol is not perfect, but let us make it work as best we can, and let us start talking about the upside, because there is very significant upside. Northern Ireland has this unique opportunity to access a very large UK single market and also the much larger EU Single Market.
If you ask anyone in the agrifood sector, in particular, and many other manufacturers in Northern Ireland, the protocol for them is very exciting in terms of business opportunity. As Senator McDowell said, there is potentially a pull factor into Northern Ireland in terms of foreign direct investment. If the protocol is stable and predictable, you could access both markets very efficiently from Northern Ireland. You might have some country of origin labelling issues, but if your target market is the EU Single Market and-or the UK as a single market, you have a very attractive opportunity for seamless trade into both, which you do not have south of the Border.
On the investment certainty issue, is it a positive or a negative that these matters come up for review in four years? It seems that a priori it is not a huge advantage if you are thinking of making a big investment and the whole thing could be radically different.
We needed democratic legitimacy for it. One of the asks of the British side was that the protocol should and could never be imposed on Northern Ireland against the will of the majority there. That is something I absolutely agree with. As much as I think the protocol can work, if the majority of people in Northern Ireland do not want it, we have to accept that. The are extraordinary consequences if we do away with the protocol. It raises all sorts of questions around the all-Ireland economy and a whole range of other things. However, there needs to be a democratic endorsement of what is effectively an international agreement.
No, the way in which that vote takes place is it is effectively a simple majority of MLAs every four years. If there is a large majority of more than two thirds, then the next vote can be put off for eight years. My hope would be, and this may be naive, is that if we can get compromise and flexibility in a way that allows business and many in the unionist community to accept the protocol, then we could get to the point where there is a very strong endorsement of it and then it does not need to come up again for eight years. Although for now, it is every four years.
While of course you would like cross-community support, you could credibly have a situation where a minority of people in Northern Ireland could do away with the protocol when a majority of people want it. Cross-community support is part of the Good Friday Agreement on issues that are devolved to the Executive and the Assembly in Northern Ireland. Cross-community support is not part of decisions for the UK Government, in terms of international decisions. The principle of consent is about what the majority want and cross-community support is a separate and important issue in Northern Ireland. The protocol issues relate to a British Government agreed international agreement, and therefore it would be a very perverse approach to say that because of the need for cross-community support, you could have a minority of people deciding the future of the protocol against a majority. That does not mean we should not look for cross-community support; of course we should. That is why, despite the fact that many in the unionist community think that I have been very unreasonable in relation to the protocol, its construct and so on, we are probably the strongest advocates for flexibility and compromise on the EU side to try to respond to the legitimate concerns that many have raised.
We should be able to significantly reduce the checks burden on goods that we can show are staying in Northern Ireland and are at no risk of crossing the border into the EU Single Market or into the EU. That is what we have been pushing Vice-President Šefovi on, and to be fair, he has responded. On the food side, he thinks we can reduce sanitary and phytosanitary, SPS, checks by 80%, as long as we can show those goods will be sold and consumed in Northern Ireland. Likewise, on the customs side, he thinks that we can reduce the burden by 50%. That is the space for agreement.
Lord Frost wants more than that. What he is asking for is that all goods that are being sold in Northern Ireland and are staying in Northern Ireland that come from Great Britain should be exempt from any form of checks, customs declarations and so on. That is a very difficult thing for the EU to deliver and it is not consistent with the protocol. However, the EU can go a long way with it to reduce that checks burden significantly in what Lord Frost would describe as inter-UK trade between Great Britain and Northern Ireland. That is the space in which the teams are currently talking.
I will try to bring Senator Gallagher back in. We will see if the communications are back running. We still cannot hear him. Senator Gallagher, if you want to send your question by the chat function, I will ask it for you. I might ask the Minister a question while Senator Gallagher is doing that.
At our last meeting, we had Vice-President Šefovi before our committee and he gave us a very comprehensive update and was quite candid in his contributions. He was questioned around the accuracy of the current proposals on reducing checks by 80%. His remark was that we know the Single Market and the customs union. He was quite strong in his remarks that what it has offered is good and doable. When pressed on what might happen if there is not a resolution or if Article 16 is triggered, he said that the EU was ready to take whatever steps are needed. A week is a long time in this process. What is the current state of the negotiations? Do you feel that there is a mood there to try to resolve this?
I have not received a briefing from today's discussion. Generally what happens is the two teams meet on Wednesday and Thursday, and it is every second week in Brussels and London. Then the two principals meet on Friday to assess progress, or not, as the case may be. Two weeks ago, there was a noticeable change in tone coming from the British side, which certainly suggested to the EU that the negotiation was worth investing in. Before that, the negotiations were going nowhere. Last week was difficult, but at the same time, substantive in terms of the discussions. The Lord Frost and Vice-President Šefovi meeting was professional and constructive. Let us wait and see what happens this week.
There is no secret in this because in Lord Frost's briefing of party leaders in Northern Ireland and other stakeholders, including business leaders in Northern Ireland, he has shown much scepticism as to whether or not the Šefovi or the Commission proposals can deliver what they say they are going to deliver; that is, the 80% reductions in SPS checks on food and agrifood products coming in to Northern Ireland and staying in Northern Ireland and the 50% figure on customs checks. I have put that directly to Vice-President Šefovi and his team and they are very clear and strong on that, in that they believe they can deliver those numbers. Not only that, but they are looking to work with the British Government to show how it can be done. Of course, that will involve input from the British side too, in terms of the sharing of data and labelling so the EU can fully understand that there is a trusted trader system that both sides can see in a transparent way. A company like Marks & Spencer, for example, has systems that can show where a product is distributed from in Great Britain. The product comes into Northern Ireland and it will be able to show the shelf from which it has been sold.
If information like that is shared, then the EU can get much reassurance around trusting that a product is staying in, sold in and consumed in Northern Ireland, and therefore the checks burden on us should be reduced dramatically. That involves partnership between both sides in terms of sharing information and data and potentially labelling as well. That is what Vice-President Šefovi means when he says we can deliver this, but we need partnerships with the British Government and the British regulatory system to make it work.
I am more hopeful than I have been. I spoke to Lord Frost last week and it was a good conversation. He reminded me that they still regard Article 16 as a perfectly legitimate tool to use. I do not believe Article 16 was ever designed to set aside large parts of the protocol. It was essentially a safeguard clause in an emergency situation to make a temporary amendment, but then to return, in time, to the normal functioning of the protocol. I do not believe that is what the British Government is suggesting it would use Article 16 for. It is effectively suggesting that if it cannot get the compromise that it is looking for from the EU, it may act unilaterally and use Article 16 to set aside elements of the protocol that it does not believe are necessary. If it does that, I do not believe the EU will respond well; in fact, I know it will not. The EU will respond very robustly and it will regard it as a fairly serious breach of good faith in terms of the protocol and the Article 16 mechanism. I am sure Vice-President Šefovi told the committee that the EU regards the withdrawal agreement and the trade and co-operation agreement ,TCA, as inextricably linked to each other. Therefore, the EU would not even agree to start negotiating a TCA until there was a withdrawal agreement in place, backed by a treaty, that is, international law. If the British Government decides to set aside elements of the withdrawal agreement, that is, elements of the protocol, then that has a carry-over into whether or not the EU can implement the TCA as agreed. That is the last place any of us want to be, particularly in Ireland, or in the UK, for that matter.
There is much at stake over the next few weeks, and the focus probably needs to be on what percentage of, and what elements of, checks can we effectively do without, and at the same time protect the integrity of the EU Single Market. How do we put systems in place that can dramatically reduce the checks burden on goods coming from Great Britain into Northern Ireland that we know are staying in Northern Ireland and can show and prove that? How can both sides work together to remove that burden and make it easier for businesses to source from Great Britain in terms of their supply chains? If we can make a lot of progress in that area, that will deal with many of the unionist concerns and many of the business concerns in Northern Ireland linked to the protocol. The EU is in that space, but it cannot remove 100% of the checks. That is not credible and it is not consistent with what was agreed. However, it can certainly show a lot of flexibility, and it is willing to do that.
I will get a briefing on where we are again on Friday. There is still quite a big gap between the two sides, if we are honest. At least the negotiations now are focused on and are serious about trying to find landing grounds, which is a welcome change. We should give those negotiating teams time and space and also the confidentiality of what goes on in the negotiating rooms that, hopefully, can facilitate the building of some trust. Trust is possibly the biggest problem.
If I am frank, the EU is concerned that if it makes a concession it will be banked and Lord Frost's team will then take that and look for more. The UK side has got to give something here, too. It is not all about the EU giving. If you look at what has happened since the start of the year, all of the concessions and flexibility have been moving in one direction only, and that has been a very successful negotiating strategy for Lord Frost and his team. However, there are limits to that as to how far the EU can go if it does not believe it is moving towards an end point through negotiation. We are pretty close to that end point now.
This is a robust negotiation. Lord Frost is a good and tough negotiator and good luck to him. The EU also has concerns that need to be protected. As Vice-President Šefovi said at this committee, its priorities are the integrity of the Single Market, not compromising it, protecting an all-island economy, protecting a peace process and ensuring there is no need for any physical border infrastructure to re-emerge on the island of Ireland. That is what the protocol is there for, and it does that job.
What we are now trying to do is to reduce the checks burden on east-west trade only, from Great Britain into Northern Ireland, which of course is the price of the protocol. Those are goods coming into the EU Single Market. I think Vice-President Šefovi has gone a long way to try to respond to the asks and frustrations of people in Northern Ireland on those issues.
The medicines issue has a solution that involves the EU changing its laws. The sanitary and phytosanitary, SPS, checks burden can be reduced dramatically as indeed can the customs issue.
The other big question that continues to be asked by leaders in Northern Ireland is on the democratic deficit issues linked to the protocol. This impacts on Northern Ireland, but it does not have a say in the future application of the protocol apart from through joint committee structures and so on. Therefore, the Commission is willing to look at formalising more structures in terms of communication. That has to be supported by the British Government as well, if it wants to do it. That is where we are.
I have one more question. Senator Gallagher has joined us in the committee room because the technology is not working and we will take a question from him. Senator Wall sent me a question because again the technology is not working.
You mentioned the word "trust" at the end of your comments, which leads on to my next question. We have just discussed the state of the current negotiations. What is the state of the current relationship between the Irish Government and the UK Government? While Lord Frost's negotiating tactics might be considered to have been quite effective, they have left a sour taste in the mouths of many people in Ireland and indeed in Europe. The consistent threat to trigger Article 16 and to undermine years of negotiation and work, to the detriment of people on this island, North and South, has been a regrettable way for the UK team to be doing business. There is a considerable body of work there for us now to try to rebuild those relationships, because they are quite strained. What is the level of engagement now between Ministers and their UK counterparts? What is that relationship is currently?
I will read Senator Wall's questions. You mentioned seizing momentum in your opening remarks, so what are the next steps? What supports are in place to deal with Irish exports and UK tariffs?
Senator Gallagher, I invite you to ask your questions. We will then go back to the Minister, because we are tight on time.
Apologies for the technical difficulties earlier. I welcome the Minister and thank him for taking the time out of his busy schedule to update us on where things are in relation to Brexit. For someone from the outside looking in on all of this, it must be hugely frustrating to be dealing with this particular issue. Following the Chair's comments, where would the Minister rate the current relationship with the British Government, on a scale of one to ten?
Perhaps he has just answered that question. In many ways, for somebody from the outside, who does not know all the facts, looking in, it is like dealing with a spoilt child in that they keep putting the hand out for more. When is a deal a deal? When is a deal finally sealed? Everyone thought this was all done and dusted, tied up legally between the two parliaments. We thought the deal was done. Here we are now renegotiating again.
It could be argued that the tactic employed by the UK has been very rewarding as far as it is concerned. It seems to be a case that the EU negotiating team keeps on giving. If I were part of the UK negotiating team, I would want more of the same because it seems to be paying off. For how long will this process go on?
Another question relates to the positives that Northern Ireland would enjoy vis-à-vis the protocol, which the Minister touched on. It puts Northern Ireland in a unique trading position whereby it can trade unencumbered and have access to the EU market, while at the same time trade within the UK and be part of any future trade agreements the UK may negotiate. There has been some evidence of that unique position already. There have been two major job announcements recently, one announced by Coca-Cola in regard to a large number of jobs being created in Belfast, and one by Almac in Craigavon which is creating 1,000 jobs over the coming three to five year period. In regard to that, Craigavon is approximately half an hour to 45 minutes from Monaghan town. As someone who comes from a Border constituency, I wonder should we be making more of those job announcements in Northern Ireland. It is a good story to tell, not just from a Northern Ireland perspective but for those of us who live in Border counties, including my colleague, Senator Joe O'Reilly. It is not that long a journey to travel from Monaghan town, north Monaghan or even Cavan to Craigavon. There are benefits for the Border community, if not for the island as a whole. Should we make more hay, if you like, out of those announcements? Should we market ourselves across the EU and across the globe, based on Northern Ireland's position, from an all-Ireland perspective? We could benefit from that unique trading relationship Northern Ireland currently has.
My final point is somewhat connected. The Minister might use his good offices to talk to the relevant people north of the Border. In early January the minimum unit price on alcohol will come into effect. For those who live along the Border, many retailers fear that day coming. We are all in favour of the minimum unit price on alcohol coming in. It has proven beneficial in Scotland in that it has had the desired effect. It was my understanding that this issue was going to be tackled on an all-island basis.
Senator O'Reilly has joined us. He was in the Chair in the Seanad. I am conscious we only have five minutes remaining. With members' permission, I will call Senator O'Reilly to ask a brief question. Apologies Senator O'Reilly, we have had the same difficulty with other members. The technology is not working. We cannot hear those using remote access. We will go to the Minister, Deputy Coveney, for his closing remarks.
On the trust question, now is not the time for me to talk about who is at fault throughout these negotiations over the past nine months. There will be plenty of opportunity to do that if we can get an agreement. I am anxious to focus on the limited but nevertheless evident progress over the past ten days or so and to try to encourage that progress even further. It is not helpful for me to talk about how people have behaved or what they have said over the past ten months or so. Clearly, it has put a heavy strain on relationships between the EU and the UK, between Ireland and the UK, and at times also between the UK and Washington in regard to the concerns coming from the White House and others on Capitol Hill. However, there will be a time to discuss all that. For now, we have a little bit of momentum in these talks and we should focus on that. I will encourage both sides to try to make progress.
When I said that the British negotiating tactic has been very successful, that is true in terms of delivering concessions and flexibility from the EU, but it is not true in terms of reputation and relationships which are very important for a country the size of the UK and a country as globalised as the UK. That is all I will say on it.
As for the next steps in regard to momentum, there are two very experienced and smart negotiators with very good teams supporting them. Let us hope that they get the political instruction to do a deal, because that is what is needed here. Negotiating teams can only do what the key decision makers, politically, allow them to do. What is needed between now and Christmas is for the British Prime Minister to give a signal to Lord Frost that we need to try to conclude these negotiations and get the best deal available, and we need a signal from President von der Leyen to Vice-President Šefovi that he needs to do the same. I have spent a good deal of time speaking to Maroš Šefovi. We are very lucky to have Mr. Šefovi. He is very interested in Ireland and Northern Ireland. He is very interested in being helpful and in solutions. He has pushed the Commission really hard, right to the edge of the boundaries of what is legally consistent with the protocol. That is because he wants to get a deal done. They are very much in that space. I hope the British side is too. They have achieved much in this negotiation in regard to changing how the protocol is both perceived and implemented but, as Mr. Šefovi said, if they ask for the impossible, then it cannot be delivered. That is a political choice for the Prime Minister. I am more hopeful now than I was a fortnight ago. Is this hugely frustrating? Yes, of course it is. We thought this issue was put to bed. Do not forget, the protocol was agreed two years ago but on 17 December 2020, the British Government agreed an implementation plan for the protocol. Michael Gove was then the key negotiator and he agreed that with Maroš Šefovi. The approach changed then, as January and February passed. The personalities on the British side changed from Michael Gove being the lead negotiator to Lord Frost being the lead negotiator and, as I said, they have achieved much since then.
The EU is getting close to its horizon of what it can do. Hopefully, that is recognised in London.
Regarding the positives for Northern Ireland, finally some people are starting to talk about that. Instead of politicians leading the debate, industry is starting to be part of that discussion in a major way. Some people have asked me if there is a threat that businesses and investment in the Republic may potentially go north? I do not see that as a threat. I would welcome a significant increase in investment in Northern Ireland. It is good for the all-island economy and, God knows, Northern Ireland deserves it, given the pulling and dragging that Northern Ireland has had to put up with throughout the Brexit debates and so on. I would not begrudge Northern Ireland that economic success at all. We have a very competitive proposition for foreign direct investment south of the Border but increasingly now, there is a strong and growing proposition for foreign direct investment in Northern Ireland. Personally I would welcome that. It is a great opportunity.
The Senator mentioned the mechanisms and compensation for tariffs. First, the TCA guarantees there are no tariffs, unless the TCA is called into question because the protocol gets called into question, as the two are interlinked. It would be incredibly frustrating if, after all the negotiations, decisions and compromises to get the TCA and withdrawal agreement in place, all of that started to unravel because of a unilateral decision in London. I hope that does not happen but if it does happen, the EU is prepared for that, I would say. I do not want to go into that too much because, again, I do not want to focus on failure when we need to be focusing on achieving an agreement and a compromise.
On minimum unit pricing for alcohol, which does not have anything to do with the protocol or Brexit, when I say we could not get the Executive in Northern Ireland to agree, I do not think that is fully fair. We have certainly indicated that we would like to do this on an all-island basis because we do not want people going across the Border to shop for cheap alcohol because we have introduced minimum pricing here. We believe it is a good public health measure to ensure that alcohol is not being used as a loss-leader or being sold for half nothing and being abused as a result. We believe that has worked in other jurisdictions and it will work here. We would of course like Northern Ireland to do this with us at the same time but we do not have any guarantees on that and we cannot wait forever. The Government's view on this is we would like to do this on an all-island basis if we can but, if not, we need to move ahead anyway. We need to try to manage the cross-Border trade consequences of that as best we can.
I have not had long conversations with my counterpart in Northern Ireland on this. This is a political decision for the Executive. I will not overreach as I sometimes get criticised for doing that by politicians in Northern Ireland. This is a matter for the Executive. It is its issue. We have signalled for some time that we want to do this, we think it is a good public health measure and we would like to do it together but it is a matter for the Executive to respond as to why it either does or does not want to do it on the same timeline as us. Efforts to do this on an all-island basis have effectively delayed this measure for longer than it would otherwise have been delayed. The view of the Department of Health is that while it may potentially cause some trade disruption potentially and cross-Border shopping, which would be frustrating, we still think that, on the whole, this is a public health measure we need to move ahead with. I think it will happen. It is a fair question and a matter I will raise with some of the political leaders in Northern Ireland whom I will meet next week.
That brings our meeting to a conclusion. I thank the Minister, Deputy Coveney, Ms Maeve Collins and Mr. Karl Gardner for their time and for giving evidence to the select committee and being on hand to answer questions. I apologise to Senators Joe O'Reilly and Wall who were unable to ask questions due to technical difficulties. I thank Members also. Today's meeting is our last meeting requiring attendance of witnesses as we are due to publish our final report in December. The select committee will meet in private session to review the draft before we approve and launch our final report.