Thursday, 3 June 2021
Ceisteanna Eile - Other Questions
10. To ask the Minister for Enterprise, Trade and Employment if he will report on the impact of the EU-UK Trade Cooperation Agreement to date; and if he will make a statement on the matter. [29420/21]
Despite the affirmations by certain politicians and commentators, Brexit is not "done". Indeed, Brexit has just started. Will the Tánaiste and the Minister of State report on the impact of the trade and co-operation agreement between the EU and the UK on Ireland after six months of its operation?
In the first five months post Brexit, businesses have been coming to terms with the new trading environment involving customs procedures and other regulatory checks at the ports. In addition, rules of origin issues have arisen in some instances, leading businesses to seek out suppliers in different markets. Businesses are adjusting to the new trading realities, finding alternative supply chains and are being encouraged to find new markets for their products.
Preparations by Government in the lead-up to Brexit have paid dividends and Departments and State bodies have engaged directly with businesses, hauliers, shipping companies, trade and representative bodies to help them on all Brexit-related issues. This has ranged from the provision of 24/7 in-person support at the ports, ready-for-customs grants to help businesses build in-house customs capacity, which are still available for businesses that are in need of them, and technical webinars and online guidance on a targeted, sector-specific basis.
The Government is committed to ensuring that the most Brexit-impacted sectors, areas and regions in the economy will be supported through the Brexit adjustment reserve. The proposed allocation of €1.1 billion to Ireland from this EU fund recognises that Ireland is one of the most Brexit-impacted member states.
It is too early, based on CSO trade statistics for the first quarter of 2021, to assess and draw any firm conclusions on trade flows between Ireland and Great Britain resulting from Brexit. Other factors are at play, not least Covid-19, as well as the temporary derogations and grace periods under the trade and co-operation agreement and the Ireland-Northern Ireland protocol. The Government is committed to a post-implementation analysis of the impact of Brexit on the economy once a sufficient period has elapsed to allow a full analysis to be undertaken.
There is quite a lot to take out from the Minister of State's response. I will try to break it up into a couple of areas. I pay credit to him, to colleagues and everyone in his Department and relevant Departments such as Revenue and the Department of Agriculture, Food and the Marine for the extensive preparatory work that was done ahead of Brexit. We can see that it was necessary.
The Minister of State said that Ireland was one of the member states most impacted by Brexit. It is quite clear that we are the most impacted. This is why it is vital that the entire €1.1 billion in the Brexit adjustment reserve is awarded to Ireland, and that Ireland does get a proportional share.
On trade flows, he said it is too early to draw conclusions based on CSO statistics, but we do see some statistics from the UK. I would appreciate if he could elaborate on the key sectors that have seen either a decline in exports to the UK or, more pertinently, a decline in imports from the UK. What efforts can be made to mitigate those issues that present themselves?
I will give a flavour of some of the figures that are available. The most recent CSO statistical data released for the first quarter of 2021 show the exports of goods to Great Britain were €3.03 billion, which is a decrease of €82 million, or 3%, on the first quarter in 2020. Exports to the EU were also down 12% on the first quarter 2020 figures. Imports of goods from Great Britain in quarter 1 this year were down 48% to €2.2 billion, compared with quarter 1 in 2020. Imports from the EU were down 6% on quarter 1 2020 figures. It is likely that a number of factors contributed to the large reduction in imports from Great Britain, including the challenges of complying with customs requirements, pre-Brexit stockpiling, and the impact of the Covid-19 pandemic. Freight movements into Ireland from Great Britain increased sixfold between the first week in January and the end of May. This is up from 1,423 movements to 8,257 movements.
I appreciate the reply. The Minister of State said it is a flavour of the figures, but it gives us a stark idea of the challenges ahead, even though most of those challenges are masked by the impact of the pandemic.
My supplementary question is on the development of new markets, to which the Minister of State alluded. In the previous questions we talked about the potential new markets through EU trade deals with third-party countries, but in the context of supply chain and imports, I particularly and crucially want to refer to the potential for developing existing markets within the Union and developing our established partnerships with countries such as France and Germany. We must also look at the opportunities provided by countries in central and eastern Europe, the Nordic region and southern Europe for imports and exports. What efforts are the Department, agencies and partners going to make to maximise every potential presented to us by the Single Market?
I too pay tribute to all of the officials for the hard work they have done in the preparation for Brexit and since Brexit in trying to help and assist the businesses that have been so challenged by disruption. The Deputy is correct that the UK remains a strategically important market for Irish companies. We can never ignore that but we also need to look to diversify into new markets. EI has been hampered by Covid-19 in its capacity to carry out physical trade missions, but work has been done virtually. Now, thankfully, as we go back into a more normal situation and with travel opening up again, EI is looking at working with enterprise clients to support them into diversifying into new markets. Trade missions will recommence. EI is determined to ensure that we support companies into new markets.