Shane Ross (Dublin Rathdown, Independent) | Oireachtas source

Brexit has the potential to have serious adverse economic, transport and tourism impacts and as a result has been identified as the main strategic risk facing the Department of Transport, Tourism and Sport. As part of my Department’s preparations for Brexit, it has engaged widely with sectoral stakeholders and has established stakeholder fora in the tourism, aviation, maritime and road haulage-freight areas to consider the implications of Brexit for those sectors.

One of the main engagements with stakeholders was on 23 January 2017, when I, along with the Minister of State, Deputy Patrick O’Donovan, hosted an all-island dialogue on the impact of Brexit on the transport and logistics sector and on the tourism and hospitality sectors. Both dialogues were very well attended with some 200 delegates from public and private organisations, North and South, across all transport and tourism sectors and from civic society. Our engagement with stakeholders will continue throughout this process. One example is the workshop on Tuesday, 4 April last, hosted by my Department on the impact of the UK exit of the EU on maritime transport regulation and on the sectors which this impacts, including merchant shipping, national shipping, fishing vessels, recreational craft, ports, equipment suppliers, service providers and training providers.

There was no immediate impact on tourism from Great Britain to Ireland immediately following the June referendum. According to Central Statistics Office, CSO, figures, overall trips to Ireland from Great Britain for the six months of July to December 2016 following the referendum were up 6.4% when compared to the same six month period in 2015, with associated revenue up 6.1% for the same period. However, the visit numbers for the most recent three month period of December 2016 to February 2017 showed a decrease of 5.9% in visits from Great Britain. It is worth noting however that the figures were still up 14% on the same period two years earlier. Tourism Ireland’s most recent situation and outlook analysis report for March 2017 shows that some in the tourism industry reported a softening in the British market in the first two months of 2017, but website visitsto Ireland.comhave been strong for the first two months of this year.

Even prior to the UK referendum result, there was a commitment in the Government's tourism Policy statement, People, Place and Policy – Growing Tourism to 2025, to prioritising tourism marketing efforts towards those markets providing higher revenue returns. The programme for Government commits to implementing the policy objectives in the policy statement and achieving the targets for Irish tourism contained therein. The triggering of Article 50 does not change this. A key element of Tourism Ireland's strategy since 2014 has been market diversification. In 2017, Tourism Ireland will continue to implement its market diversification strategy and intends to maximise holiday revenue through investment in mainland Europe and North America. In addition, the depreciation of sterling against the euro since the UK referendum means that value for money will be a key message for Tourism Ireland in Britain this year. Restoring Ireland’s share of voice in the overseas market is within our control and the tourism action plan for 2016 to 2018 commits to restoring overseas tourism marketing funds to pre-recession levels on a phased basis. There is no doubt that the negotiations ahead will be very challenging. That said, Britain is our nearest market and will continue to be important for tourism to Ireland for a long time to come.

Access to and from the island of Ireland for trade and tourism is totally dependent on the ease of our maritime and air networks. Within the island, the ease of movement of trade and people between North and South cannot be understated. Disruption to current access arrangements or to movements between North and South will have major implications for Irish businesses and for the overall economy. There is general consensus across all transport operators and users that any additional barriers, be they physical, regulatory or technical, to the current access arrangements between the UK and Ireland, including North and South, will be detrimental to transport operators and to the overall economy. This means retaining the common travel area and access to the Single European Market, common visa arrangements and the single aviation area in so far as possible.

With regard to sector-specific concerns, the aviation sector is critical to Ireland. As an island with an open economy, it is essential for our trading relationships, for all of our industries, especially tourism, manufacturing and retail, and for our participation in the global economy generally. Aviation contributes more than €4.1 billion to our GDP, comprising €1.9 billion directly from aviation, €1.3 billion through the supply chain and €0.9 billion from associated spending by people employed in aviation. Tourism, which depends heavily on aviation, accounts for a further €5.3 billion contribution to GDP.

The current extent of air traffic between the UK and Ireland is enormous, at approximately 11 million passengers and more than 100,000 aircraft movements per year. Initial analysis of the aviation related impacts of Brexit on the wider Irish economy indicates an effect of between 0.1% and 2%, depending on the severity of the disruption to traffic.

Brexit, unless accompanied by some form of agreement replacing the impacted traffic rights and associated regulations, will affect the existing rights of Irish licensed airlines to fly between the UK and the EU, within the UK, and between the UK and a range of other third countries, including the US and Morocco. Specific political consent will be required for existing traffic rights to remain available, and the desired end result is for an EU-UK comprehensive agreement to be agreed. Uncertainty regarding traffic rights is exacerbated by ownership rules affecting Irish airlines. To retain an EU airline licence and access to the EU aviation Single Market, an airline must be majority owned and effectively controlled by EU nationals.

In terms of the impact on airspace and the safety regulatory environment, virtually all regulations and procedures are currently developed either through the EU's Single Sky Committee, for airspace, or the European Aviation Safety Agency, for safety regulation. As regards aviation security, co-operation measures and regulatory developments are decided mainly at EU level through the AVSEC committee.

It is estimated that seaborne freight accounts for 84% of Ireland's trade in volume and 62% in value terms. The UK is Ireland's biggest trading partner and there has always been free movement of both goods and people between the two countries. Any negative impact on bilateral trade flows will impact on ports and shipping. Trade through the ports has been strong since the UK referendum due to the overall strength of the economy. Dublin Port handles 46% of all seaborne trade in volume on an all-island basis, playing a key role in facilitating trade in and out of Ireland. Approximately 60% of trade in and out of Dublin Port is going to and from the UK.

The UK has signalled it does not expect to be part of the EU customs union. Any additional levies or tariffs that may be introduced may divert goods to EU markets away from the UK and may depress Ireland's overall exports. The reintroduction of border controls for freight, together with additional administrative requirements, would have a significant negative impact on the efficiency of the transit of goods through the ports which in addition to having additional cost implications would also have a significant impact on the capacity of ports as a result of the likely negative impact on land utilisation and other port infrastructure. International Maritime Organization, IMO, and International Labour Organization, ILO, standards will continue to apply, but there is also considerable EU harmonisation legislation in the maritime area, including in issues such as EU recognition of various certificates. That raises concerns as to how these issues will be dealt with post Brexit.

The haulage and logistics industry is highly competitive and characterised by low margins. A significant proportion of Irish exports, particularly perishable goods, to mainland Europe use the UK as a landbridge, as it is deemed the most timely and efficient route compared with the alternative of direct sea routes. Brexit could impact on the efficiency of the landbridge routes particularly where there are increased border and customs procedures and delays or where the UK may subsequently apply differing standards, road charging or regulatory regimes. Current alternatives to the UK landbridge are regarded as slower and lacking capacity. That is a significant area of uncertainty for Ireland and one that could have a major impact on the capacity and efficiency of future trade routes to the Continent.

There is also considerable cross-Border traffic with hauliers operating on both sides of the Border. Such hauliers currently may make multiple Border crossings in a single day. Border controls could significantly disrupt these operations or render them unfeasible. In a similar vein, international haulage from Ireland to the Continent could have to cross the borders multiple times. For example, a journey from Donegal to France would involve four border crossings in each direction if using the UK landbridge. Employment issues and cabotage will also emerge as issues within road haulage. UK drivers will be considered to be non-EU so work permits may be required, leading to potential driver shortages.

Both the domestic and international road transport sectors are regulated by EU law. Irish bus and coach operators travelling to the UK, or transiting through the UK to access continental Europe, could be faced with restrictions, increases in costs and restrictions on carrying out public transport cabotage operations in the UK, for example, picking up and setting down passengers as part of a cross-border trip, which is especially an issue for services to and from Northern Ireland. As with road haulage, the issue arises as to whether the UK would agree to implement all EU transport rules.

The Road Safety Authority has advised that it and the respective road safety authorities in the UK, including Northern Ireland, have a close working relationship and, while it is too early to assess the possible impact that Brexit may have on that relationship, for the short term the RSA is continuing as normal with its co-ordinated enforcement controls, knowledge sharing, etc.

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