Micheál Martin (Cork South-Central, Fianna Fail) | Oireachtas source

Táimid buartha faoin mhéid atá tar éis tarlú go dtí seo ó thaobh an gheilleagair de agus na taraifí go léir atá ar an bhfód faoi láthair. Is é bun agus barr chúrsaí geilleagair na tíre seo ná a bheith ag trádáil ar fud an domhain, go hoscailte agus go forleathan. Níl aon amhras ach go mbeidh drochthionchar ag na taraifí seo ar chúrsaí eacnamaíochta i gcoitinne agus in Éirinn.

I am sharing my time with the Minister, Deputy Donohoe. For an open economy like Ireland's, recent developments in trade have been especially concerning. We have enjoyed decades during which global trade has increased, new markets have opened and supply chains have become ever more diverse and complex. We are clearly now entering a different era. Ireland has benefited from and supported a world order in which trade has become more open and globalised. We now need to adjust to a different situation, which some are consciously stepping back from. The new policy approach in the United States is one in which the protection of national markets and the raising of protective barriers play a central part. Ireland has advocated and continues to do so for an ambitious world trade agenda. We believe trade not only brings economic benefits, but it helps lift people and countries out of poverty, and it contributes to a more stable and predictable world. The era of free trade over the past 30 or 40 years has led to the largest increase in living standards ever recorded in the world.

Retreating behind defensive barriers may appear attractive on the face of it, but it is not a win-lose proposition. Ultimately, everyone loses, and the poorest lose most of all. That is why the announcements on tariffs made by the US Administration on 2 April are so deeply concerning and regrettable. They have had an immediate and negative impact on global financial markets and there has been significant turmoil in the markets today. The medium- to long-term consequences for the world economy will be grave indeed if solutions are not found. A baseline tariff of 10% on all countries entered into force on 5 April, with further tariffs coming into effect today. This will mean a blanket 20% tariff on all exports from the European Union, including Ireland, to the US from today.

While major tariff announcements were trailed in advance, and the Government has been actively preparing, we hoped that this harmful and destructive step could have been avoided. These new tariffs are in addition to the decisions last month by the US to impose tariffs on steel, aluminium and derivative products, as well as on the automotive sector. Together, the US tariffs on steel and aluminium, on cars and the blanket 20% tariff on goods from the European Union affect around €380 billion worth of trade between the United States and the European Union. There is no way to sugar-coat it. A 20% blanket tariff on most goods could potentially have a very significant negative impact on investment and the wider Irish economy. It represents a huge challenge to Irish exporters to the US across all sectors. We are already hearing from some who are seeing their orders from the United States slowing or even drying up entirely, putting valuable and skilled jobs at risk. There may be more to come. We have yet to see the approach the United States will take on pharmaceuticals, semi-conductors and other sectors excluded from the so-called reciprocal tariffs.

I hope the United States will reflect carefully before taking any further steps. Industries like pharmaceuticals involve deeply complex and interconnected supply chains, as we saw clearly during the pandemic. I have spoken to many leaders in the pharmaceutical and medtech sector in recent days to discuss how best we can navigate these very serious challenges.

I know how concerned they are. It is not a sector in which production can be turned on and off overnight. As we have seen in Ireland, this sector involves exceptional expertise, long-term research and innovation, very significant investment in high-tech plants that can produce to exceptionally high standards, a skilled and dedicated workforce and, most important, patients, people who cannot afford to see the price they pay soar or to have the supply of vital medicines interrupted. I hope that, having reflected, the United States will step back from disrupting this most sensitive sector. I am sure we can find a negotiated solution in which we can get a reasonable settlement.

We see no justification for the imposition of tariffs on European Union exports. Tariffs are counterproductive and deeply disruptive. They drive inflation and hurt consumers on all sides. There will be no winners in this, least of all the United States' taxpayers who will bear the burden of higher costs. As stated starkly by the President of the European Commission, Ursula von der Leyen, the global economy will massively suffer. Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe, including the most vulnerable countries now subject to some of the highest US tariffs.

The European Union response to date has been the correct one. As I agreed with President von der Leyen in our recent phone call, the European Union will proceed in a calm, strategic and measured fashion. We will continue to seek negotiated solutions. We are disappointed that we have reached this point, but it is always essential to continue dialogue and negotiation. There is always time to strike a fair deal. This approach was endorsed by European Union trade ministers at their meeting last Monday. There was a strong sense of unity and agreement that the European Union should take the necessary steps to safeguard its interests. All shared the view that this dispute requires dialogue and negotiation with the United States. At the same time, the European Union will have to respond in a proportionate manner that protects businesses and citizens.

Today, based on a proposal from the Commission, European Union member states are considering a decision to proceed with counterbalancing measures for the US tariffs on steel and aluminium. It has been agreed that they will come into effect on a staggered basis, first on 15 April and then on 15 May. They will affect approximately €22 billion in trade between the European Union and the United States.

The Government has been in ongoing contact with the European Commission and has made Irish sensitivities clear. I discussed these issues directly with President von der Leyen, raising our concerns on the potential inclusion of bourbon and dairy on the proposed list of European Union countermeasures. I am pleased that the concerns of Ireland were fully taken into account. The European Union continues to reflect on and prepare countermeasures to the tariffs announced by the US on 2 April. However, as I said, and as has been made clear by the Commission, the European Union is also prioritising negotiation and dialogue with the United States. Should negotiations fail, it will be important to consider further countermeasures by the European Union that protect our businesses and citizens.

Ongoing contact with the United States and the Trump Administration is crucial if we are convince the United States to come to the negotiating table. When I met President Trump in the Oval Office last month, I raised our concerns about tariffs and their potential adverse effect and impact on the two-way and mutually beneficial economic relationship between Ireland and the United States. The Tánaiste had a useful phone call with United States Secretary of Commerce, Howard Lutnick, on 24 March and is in Washington today to meet him in person. The European Union Trade Commissioner, Maroš Šefčovič, is permanently engaged with his United States' counterparts.

There are also serious concerns, which I share, about how the United States' tariffs and European Union countermeasures could impact Northern Ireland and the all-island economy. The new tariffs announced by the United States do not affect the United Kingdom in the same manner, as it is subject to the baseline 10%. This will have an impact on Northern Ireland. The Government is conscious of this. We are working through these issues and we will continue to be in close contact with the Northern Ireland Executive.

There may be specific issues for the agrifood sector, not least due to the integrated supply chains in this industry, North and South, and the customs rules of origin, which define the origin of a product for tariff purposes. We learned a lot about this in the Brexit period so we understand that supply chains on this island are deeply connected and that any change to current integrated arrangements would require huge investment. The Minister, Deputy Heydon, and his team are looking at the potential impacts on the agricultural sector in more detail. The Windsor Framework offers some protections. Arrangements are in place that allow Northern Ireland traders to apply to the United Kingdom authorities to be reimbursed in respect of EU import duty paid or deferred on goods brought into Northern Ireland and that do not enter the Single Market.

The impact of the new tariffs is wider than any one sector and will potentially impact all goods being exported, North and South, in different ways. We are very aware of this and we will continue to highlight the particular situation of Northern Ireland and, more broadly, the all-island economy in all our discussions with interlocutors, including the United States and the European Commission.

While the challenge we and our European partners now face is not to be underestimated, we are taking this on from a position of strength. Our economic performance in recent years has been robust and we have near full employment. We have seen real, substantive jobs growth across all regions. This economic success has been based on an openness to trade and investment with all countries - an approach we must continue to advocate for, including by calling for an ambitious European Union trade agenda.

Ireland remains committed to the principles of free and open trade, which have underpinned our economic success. Free and open trade brings economic opportunities, creates well-paid jobs and fosters innovation. It builds economic resilience within a strong rules-based international trading system. Our membership of the European Union makes us part of a growing network of European Union free trade agreements, supporting more opportunity for exports and investment, helping support jobs and growth at home, maintaining strict European Union standards on food safety, animal and plant health, and supporting better environmental and human rights standards around the world. That is why we will bring forward legislation to ratify the Canada-European Union trade deal. I trust that on this occasion the Opposition will support that legislation because it is good for business, jobs and small to medium-sized companies in Ireland. I never understood the opposition to it, given that trade is the flesh and blood of our economy.

As a member of the European Union, we want reforms. We want to double down on the Single Market, which should be part of the European response, remove more barriers within the European Single Market and also develop a savings and investment union through negotiation with fellow member states.

Our trading relationships have resulted in public finances that are in a position of relative health. We have also provided for significant reserve funds to ensure we continue to invest in our country's future prosperity. We acknowledge that much of our budget surplus can be attributed to the strength of corporation tax revenues, a significant portion of which must be considered windfall in nature. This is something that must be carefully managed. In resisting the pressures to spend too much in recent years, we now have a strong fiscal position to start from. While we continue to work to address the risks we face and exert influence where we can, central to our response to tariffs must be a greater focus on increasing our competitiveness, controlling costs where we can, delivering critical infrastructure and investment and, in particular, driving energy transformation by enabling offshore wind farms to be developed.

The new programme for Government, which outlines our commitment to delivering for all people and regions across our shared island over the next five years, is very strong in this regard. In the coming months, the Government will bring forward an action plan on competitiveness and productivity, with a focus on issues such as the cost and regulatory burden on business, research, development and innovation, planning and regulation, and energy costs. This will be an important plan, setting out how we can continue on our path of economic development, maintain our attractiveness for investment and so forth.

I have engaged with some of the most impacted companies at the highest level, helping to inform our response. We are working closely with businesses and workers, through the Labour Employer Economic Forum and the Government's trade forum, considering how best we can collectively respond to the challenges we face. This means working constructively, as we have in other recent challenges, to minimise the impact on employers and workers in affected sectors and to ensure our future economic prosperity. Our track record in protecting the economy and jobs, whether on foot of Brexit, Covid or the war on Ukraine, is clear. However, the challenge we face now is different. What is needed is a strategic and thought-through approach. We will develop our analysis in the coming weeks to better understand the impacts we face, including distinguishing between temporary and structural changes. We are facing into a period of high uncertainty, which could put considerable pressure on the public finances. We must proceed carefully and manage the resources we have available. We already have in place a strong set of employment and business supports that are available to affected companies. State agencies are stepping up their engagements with industry. Supports are available, including grants for strategic assistance, market discovery and diversification, and digitalisation and innovation.

A global network, including Enterprise Ireland’s 42 overseas offices, is already working with companies to find and develop new markets. For workers, we have a short-time working scheme to help those placed temporarily on a shorter working week by their employers and a new jobseeker’s pay-related benefit to better protect the incomes of those who might lose their jobs.

Most of all though, we need to avoid being deflected from the core challenges which will sustain long-term prosperity. They are investment in infrastructure; investment in our people through education, training and skills; investment in innovation; and a more focused approach to regulation and addressing costs in our economy. We will not be complacent in managing the challenges we face. The Government is committed to protecting our economy and jobs, developing our enterprise base and enhancing our attractiveness for investment and, in doing so, ensuring our continued prosperity. We do this as proud members of the European Union and as an integral part of a market of 450 million people, one of the biggest markets in the world. Where we are working with our EU partners, we can negotiate from a position of strength.

See this speech in context