Stephen Donnelly (Wicklow, Fianna Fail)
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27. To ask the Minister for Foreign Affairs and Trade the recent progress that has been made regarding Ireland's domestic responses to Brexit, including progress with our EU counterparts; and if he will make a statement on the matter. [53240/17]

Stephen Donnelly (Wicklow, Fianna Fail)
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There is a lot we still do not know about Brexit. We do not know whether there will be a hard or soft Brexit. We do not know if there will be a transition period. If there is such a period, we do not know how long it will be or what conditions might apply to it. We do not know whether there will be a deal. One of the parties might walk away from the table over the next one, two or three years. We do not know any of these things. As the Tánaiste knows, this level of uncertainty is bad for business. I will give an example of how it is affecting businesses in Ireland right now. Despite Ireland's significant success in the agrifood sector, it has been shown in a new ESRI analysis that investment in the sector has decreased over the past 18 months. It is reasonable to assume that this reduction is partly linked to Brexit. There is a lot we do know. Sterling has fallen to a point where more and more Irish firms are finding it impossible to compete. The UK economy is in trouble. Growth is now anaemic.

Pat Gallagher (Donegal, Fianna Fail)
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The Deputy should ask his question.

Stephen Donnelly (Wicklow, Fianna Fail)
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We know that trade will be more difficult regardless of the type of Brexit that happens. We also know that tens of thousands of Irish firms trade with the UK.

Pat Gallagher (Donegal, Fianna Fail)
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I will call the Tánaiste.

Stephen Donnelly (Wicklow, Fianna Fail)
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Given what we know, what supports are in place for Irish firms and Irish jobs that are exposed to Brexit?

Simon Coveney (Cork South Central, Fine Gael)
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I have responsibility for co-ordinating the whole-of-Government response to Brexit. In this capacity, I continue to work closely with colleagues across the Government to address many of the challenges resulting from Brexit, some of which the Deputy has accurately referred to. Detailed sectoral work is being done by individual Departments and through cross-departmental co-ordination structures chaired by the Department of Foreign Affairs and Trade. These structures represent an active channel through which all relevant Departments are providing research, analysis and overall policy input to the Government's overall response to Brexit, including its priorities for the next phase of the Article 50 negotiations. I hope those negotiations will provide some clarity over the coming months. As part of the planning and preparation being undertaken through these structures, there is an important focus on deepening the Government's analysis and understanding of the exact consequences of a range of different possible scenarios, including a scenario in which no withdrawal agreement is concluded.

Engagement with stakeholders is an important pillar of the Government's overall response to Brexit. Within the framework of the all-island civic dialogue on Brexit, three plenary meetings and 20 sectoral meetings have taken place in locations across the country. The Brexit stakeholder forum, which has a more limited membership, has met four times since its establishment in September, most recently last Friday in the wake of the publication of the Commission-UK joint progress report. The Government is actively responding to the domestic implications of Brexit. In addition to our overall budgetary and capital spending policies, significant measures amounting to over €50 million were announced in budget 2018, including a new €300 million Brexit loan scheme for businesses, a €25 million Brexit response loan scheme for the agrifood sector and additional supports for the food industry.

Additional information not given on the floor of the House

The increased funding for the Department of Foreign Affairs and Trade and the State agencies involved in export promotion will allow for the opening of six new diplomatic missions.

The support of our EU partners and the EU institutions has been a key factor in securing the positive outcomes achieved to date, including the agreement reached last week. The Government will continue its intensive engagement, particularly with member states which share our concerns. We will aim for a withdrawal agreement based on the commitments set out in the Commission-EU progress report, an ambitious framework for the future EU-UK relationship and transitional arrangements which will give time for the detail of that relationship to be negotiated and for businesses and citizens to prepare.

Stephen Donnelly (Wicklow, Fianna Fail)
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We have been waiting for these sectoral reports all year. I have probably asked for them from the Tánaiste, the Taoiseach and the Minister for Business, Enterprise and Innovation on five or six occasions. I keep being told that they are coming or not coming, or that they are being put together or not being put together. There is a fund which will provide credit to enterprise. I put it to the Tánaiste that the domestic response is in stark contrast to the international response. Business people like farmers, bed and breakfast owners, hoteliers, traders and agrifood exporters are not seeing the help that is needed. The National Competitiveness Council warned a few days ago that small exporting firms might not survive Brexit, even if tariffs are not introduced, without a relentless focus on competitiveness. I put it to the Tánaiste that we are not seeing such a focus. In November, a survey conducted by InterTradeIreland found that 95% of businesses across this island do not have a plan for Brexit, which represented a slight decrease on the 97% figure recorded last year. A survey conducted by a Department here found that just 15% of small and medium-sized enterprises have taken some form of action on Brexit. The reality on the ground is that firms are not getting ready. I suggest that one of the main reasons for this lack of preparedness is that firms are not getting the support they need from the Government. What has the Tánaiste done to secure the relaxation of state aid rules? What has he done to provide grants, in addition to loans?

Pat Gallagher (Donegal, Fianna Fail)
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Go raibh maith agat.

Stephen Donnelly (Wicklow, Fianna Fail)
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What has he done to provide high-quality training in areas like pricing strategy and market development? What has he done to ensure that our firms will be able to avail of proper, joined-up supports in the markets of the 26 member states that will remain in the EU with us?

Pat Gallagher (Donegal, Fianna Fail)
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The Deputy can ignore me, but he cannot ignore the clock.

Simon Coveney (Cork South Central, Fine Gael)
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I accept that these are challenging times for thousands of companies which rely on trade with the UK. Approximately 38,000 Irish companies have significant trade interests with consumers and customers in the UK. The Deputy has attended many of the meetings I have attended at which Enterprise Ireland, Bord Bia and IDA Ireland have provided information and updates. They have seen an increase in awareness levels among their client companies about the need to prepare for Brexit. There is huge uncertainty because we do not know what the final outcome will look like. We are anxious to move on to the second phase of the negotiations on Friday to try to answer many of the questions being asked by companies in the UK and Ireland. There is no doubt that we will speak to the Commission about state aid rules if the outcome of Brexit looks like it will be very damaging from an Irish perspective, particularly in the context of Irish trade with the UK. In such circumstances, we will talk about the measures we can take in response. We will certainly not get agreement on the relaxation of state-aid rules in the absence of an understanding of what Brexit will look like.

Stephen Donnelly (Wicklow, Fianna Fail)
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While Fianna Fáil has supported the Government's international efforts on this agreement, I believe the Government is asleep at the wheel when it comes to domestic preparations. I have heard the mantra that "Brexit has not happened, and we will start talking about state-aid rules when we know what is going to happen" again and again, but we might not know the final trade deal for ten years.

Simon Coveney (Cork South Central, Fine Gael)
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That is not what I said.

Stephen Donnelly (Wicklow, Fianna Fail)
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Businesses are in trouble today. The conversation on state-aid rules needs to happen today. We have had three Ministers for Business, Enterprise and Innovation in the past five months. I am yet to see a coherent and substantial response. I accept that Enterprise Ireland is helping a few hundred companies, but that is not enough. The Tánaiste spoke about 38,000 Irish companies, but I remind him that 90,000 such companies are importing and exporting from the UK. Tens of thousands of other companies will be indirectly affected by Brexit. The UK is a big economy. I think it is the sixth biggest economy in the world. The economy of the 26 other remaining member states is five times bigger than the UK economy. Our level of market penetration in those 26 member states is one ninth the size of our market penetration in the UK. The opportunity is there, but it is just not good enough to say we will need to know what the final shape of Brexit is before we get serious. We have to start getting our firms exporting out to the 26 member states that are remaining in the EU. The Tánaiste and I are aware that, regardless of what happens, Brexit will make it much more difficult for our firms to trade with the UK.

Simon Coveney (Cork South Central, Fine Gael)
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If the Deputy looks at the figures, he will see that this is exactly what is happening and has been happening for quite some time

Stephen Donnelly (Wicklow, Fianna Fail)
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It is not.

Simon Coveney (Cork South Central, Fine Gael)
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We need to diversify our markets because some sectors are too reliant on the British market. That would be necessary even if Brexit was not looming. We have intensified those efforts, for example by increasing staffing in all the key State agencies in this area. The Minister for Agriculture, Food and the Marine, Deputy Creed, has been spending a lot more time on trade missions than would probably otherwise be the case. We have seen a dramatic increase in agrifood trade with big markets like China. Such trade has almost reached €1 billion per annum.

Five or six years ago, that figure was probably less than €200 million.

We are seeing significant increased efforts to find alternative markets in anticipation of problems in the context of Brexit, but that does not happen overnight. The relationships that we have in the UK are still strong, still functioning and still need to be maintained. At the same time, we are opening up other options for companies to trade, particularly in the agrifood sector.