Mr. Gerard Brady:

If we look at Mercosur, IBEC is very supportive of trade deals in general. There are probably mixed views within the different sectors in IBEC on this deal. Some sectors will be challenged by Mercosur, and we must listen to them too. Lots of sectors, though, are also supportive of the agreement. For diversification purposes, if we look across the world, we will see that we actually have significant challenges right on our doorstep in Europe. Recent analysis shows that if we reduced some of the Single Market barriers within Europe and got trading more among ourselves, we could offset pretty much all the trade we will lose with the US due to tariffs. The IMF has done some detailed work and it shows that the barriers to goods trade within the Single Market are equivalent to a 40% tariff on the trade of European states with each other. Regarding the barriers to services, things like non-recognition of qualifications are equivalent to a 110% tariff within the Single Market.

At the European level, then, that is the most impactful thing we could do. It is the case from Ireland's perspective as well. Recent work done on this aspect by the Central Bank came out just this week. The most impactful things we could do are to work at a European level to reduce the barriers to trade within Europe and to support our companies in trying to trade within Europe. Lots of reasons explain why we have not done that enough traditionally and have gone straight to the UK. These include language, taste and all the rest. If Brexit were not enough of a reminder, here is another opportunity to address the situation. We learned from Brexit that companies that had the resources diversified very quickly. We saw this in the food sector. The dairy industry diversified very successfully during Brexit. Other, lower margin parts of the food sector did not because they did not have the funding or capacity to invest in those things. It is critical, then, to support companies to diversify that are more challenged in terms of their own resources.