Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

Theresa May made a speech in Florence on Friday, 22 September, last. While a number of the points made in the speech are welcome, it is clear that the UK is intent on delivering a hard Brexit. We welcome that the Prime Minister emphasised in her speech the need to protect the Good Friday Agreement and the common travel area and ruled out any physical infrastructure at the Border.

The UK has been our largest trading partner for centuries and our countries trade approximately €1.2 billion in goods and services each week. All countries will be affected by Brexit, but Ireland will be disproportionally affected on several fronts among the EU member states. The issue of the Border is particularly complex and while we welcome that the UK has ruled out a return to any physical infrastructure at the Border there is no clarity on how it plans to avoid this, given that it is intent on leaving the customs union. The British have created this problem so we wish to see how they will solve it. Domestically, much more needs to be done to be Brexit ready. On several fronts Brexit is nothing short of a disaster for the people of Northern Ireland, the majority of whom voted to remain. Ultimately, Fianna Fáil wishes to see a Brexit deal that secures a trade deal which is as close as possible to what we have now. We also must maintain the almost invisible Border on the island.

The UK leaving the Single Market and possibly the customs union will have serious consequences for Ireland’s economy. Although Ireland has significantly diversified its economy and lessened its dependency on the UK market, Brexit will nevertheless have a profound impact on Ireland across a range of sectors. Some 14% of Ireland’s total exports go to the UK. Similarly, imports into Ireland from Great Britain accounted for 24% of total goods imported in 2015. In fact, in some sectors this reliance has increased over time.

Some of the most exposed products to the UK under the proportional exposure measure are Irish exports predominantly from the agrifood sector. A recent report by Bord Bia illustrates the challenges ahead for the agrifood sector, a sector that has already lost up to €570 million due to sterling depreciation. Currency fluctuation and the lack of certainty in currency rates are causing huge problems for the sector. Despite the growth in new markets, the UK remains by far the single largest trading partner for the agrifood sector. In 2016, agrifood exports to the UK totalled €4.8 billion or 39% of all our exports while imports were €3.7 billion or 40%, with a trade surplus of €1.1 billion.

Ireland’s food and live animal sector is substantially more exposed to the UK when compared with the other 27 member states. This sector accounts for just under 30% of Ireland’s goods exports to the UK. At the agrifood sub-sectoral level, Ireland’s meat and dairy products, in particular, are substantially more exposed to the UK in comparison with other countries. Some 50% of our beef exports and 26% of dairy exports go to the UK, as do 80% of our cheddar and 90% of our mushrooms. Regardless of what funding we put into State agencies, that dependency will take a long time to erode. Teagasc estimates that a 10% fall in the CAP, along with lower UK food prices due to tariffs, could reduce farm incomes by 26%.

Brexit poses challenges in terms of changes to the EU-UK trading relationship, changes to regulations and standards, border controls and certification and the related areas of veterinary and health certifications. For example, in the last couple of months stricter controls and more checks were put on Brazilian imports into the EU. If the UK leaves the EU, will it follow what the rest of Europe does? Among other actions what we require is: a Minister for Brexit to oversee and co-ordinate the cross-departmental approach required; detailed contingency and scenario planning, by sector, for a hard Brexit; increased resources for our State agencies, including the IDA, Enterprise Ireland and Bord Bia; an exporters fund to assist companies to diversify into new markets and maintain their UK market share; export credit to be available to offer finance to companies for international export operations and other activities; regulation changes to allow credit unions to loan to businesses; the corporation tax rate protected; a review of strategic plans, such as Food Wise 2025, in light of Brexit and the potential impacts on the development of the agrifood sector over the next decade; support for the regions and targeted measures to ensure that Brexit does not contribute to greater regional imbalance. It is the parts of this country that are dependent on agrifood businesses that will feel the chill of Brexit most.

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