Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I welcome the opportunity to update the House on the state of play regarding the Brexit negotiations. As Senators will have seen, we had a very productive time yesterday in Dundalk with the Taoiseach and the EU's chief negotiator, Michel Barnier, at the fourth plenary meeting of the all-island civic dialogue. I will say a little more about that later. Before doing so, however, I wish to address two distinct but complementary tracks of the Government's work: first, the state of play in the Article 50 negotiations; and, second, the intensive work being undertaken to mitigate the impact of Brexit on Ireland and to get businesses and citizens as Brexit-ready as they can be.

I will deal first to the negotiations. The European Council in March was another significant milestone in the withdrawal process. EU leaders took stock of the progress made by EU and UK negotiators on drafting a legally-binding withdrawal agreement to give effect to the principles and commitments agreed by the two sides last December. They also adopted guidelines setting out the EU's approach to the framework for the future EU-UK relationship. As regards the withdrawal issues, EU leaders welcomed the agreement reached by negotiators on parts of the withdrawal agreement, including on citizens' rights, the financial settlement and the transition. However, they also underlined that work remained outstanding, including on Irish-specific issues. As the House is aware, the unique issues relating to Ireland are addressed in the draft protocol on Ireland and Northern Ireland, which is an integral part of the withdrawal agreement. Some progress was made on this draft protocol during the negotiations that immediately preceded the European Council in March.Agreement was reached on some articles of the draft text, including the common travel area and other areas of North-South co-operation, as well as areas linked to the Good Friday Agreement. This is recorded in a colour-coded version of the draft withdrawal agreement published by the Commission task force on 19 March. The sections agreed by the two negotiating teams are marked in green, the sections agreed in principle are marked in yellow and the sections not yet agreed are marked in white. It is very clear now in the withdrawal document, which essentially will become a withdrawal treaty, what is agreed, what is agreed in principle but needs to be finalised in the wording, and the areas where there is no agreement and which require more negotiation.

Importantly, the UK agreed in March that a backstop solution for the Border will form part of the legal text of the withdrawal agreement. The two negotiating teams agreed that this legally operable backstop will be in line with paragraph 49 of the joint progress report agreed last December and that this backstop will apply "unless and until" another solution is agreed.

The UK has also agreed that all the issues identified in the EU text will be addressed to deliver a legally sound solution for the Border. For some, that progress was lost. We hear a debate now on whether we can accommodate the so-called Irish Border backstop in the withdrawal treaty, but that commitment has already been made and does not need to be made again. The question the negotiators are now grappling with is how to do that. How do we agree a text that both sides can support in the withdrawal agreement? As Michel Barnier said yesterday, there will be no withdrawal agreement without a text relating to the Irish Border backstop that is legally operable. I will discuss this further presently.

The Prime Minister, Mrs. May, confirmed these assurances in her letter to President Tusk of 19 March, which was part of a packaged deal at the time. This was in addition to reiterating the UK’s commitment to agreements reached last December on protecting the Good Friday Agreement in all its parts and sustaining the gains of the peace process. This also includes the overarching guarantee of avoiding a hard border. We have been clear at every stage that the backstop is only that, a fallback or insurance mechanism. In fact, David Davis referred to it as a spare parachute. While it is our preference to resolve issues relating to the Border through a comprehensive future relationship between the EU and the UK, it is crucial that we have certainty in all scenarios on the commitments already made on Ireland and Northern Ireland. The reason we want to have the backstop is to provide the reassurance that things cannot get worse than this, and then we go on to negotiate, we hope, something better that suits everybody.

The draft protocol and other outstanding withdrawal issues have been the subject of detailed negotiations between the EU and the UK since the March European Council, with the aim of closing the gaps that remain. These negotiations are ongoing and it is the European Council’s stated intention to return to the remaining withdrawal issues, including the protocol on Ireland and Northern Ireland, and to the framework for the future relationship at its next meeting in June. Some have suggested that setting targets for June is an artificial deadline, but it is not. June is specifically mentioned in the guideline document for the task force, in other words, its negotiating mandate, so we can assess progress as we move towards where we need to get to by the end of October next. The EU has also made it clear that nothing is agreed until everything is agreed and that negotiations can only progress as long as all commitments undertaken so far are respected in full.

In the last six weeks, I have met and discussed Brexit with my counterparts from Sweden, Croatia, Denmark, Finland, Germany, Greece, Latvia, Lithuania, Estonia, the Netherlands and Portugal, all of whom expressed their commitment to this principle and their continuing solidarity with Ireland. This support has always been forthcoming at every stage from Michel Barnier and his team, as we saw again yesterday. Ahead of that engagement, Mr. Barnier had set out his view, shared by the Irish Government, that we will need to see substantial progress on the Irish issues before the June European Council. This is a message that I have set out in very clear terms in recent engagements with British Government representatives too, along with my expectation for a significant increase in the pace of progress over the coming rounds of negotiations. Our teams in Dublin and Brussels are working daily with the task force led by Michel Barnier. We saw the fruits of that collaborative work in December and in March and I am confident it will drive us towards the end we need to reach both in June and, more importantly, in October. I am very grateful for the diligence and commitment the EU task force has shown in understanding the complexity and vulnerabilities of the Irish situation linked to Brexit.

As regards the EU’s approach to the framework for the future EU-UK relationship, the Government has always been clear that we want the closest possible future relationship between the EU and the UK. I welcome that this perspective is clearly reflected in the guidelines. It is envisaged that this future partnership will not only cover trade and economic co-operation, but will also encompass other areas such as the fight against terrorism and international crime, co-operation on environment and sustainability issues as well as security, defence, foreign policy and development aid.

With regard to the economic relationship, the European Council has confirmed its readiness to start work towards a balanced, ambitious and wide-ranging free trade agreement. While a free trade agreement is not Ireland’s preferred end goal in the negotiations, we recognise that the European Council has to take into account the repeatedly stated positions of the UK, including its wish to leave the Single Market and customs union, which set limits on the depth of the future partnership. We want something much closer than a free trade agreement, if possible. It is not loo late for the UK to revisit its red lines on these options; indeed, we are hopeful that such a re-examination may yet take place. This is especially important because it is clear that being outside the customs union and the Single Market will inevitably lead to frictions in trade and will have negative economic consequences, in particular for the UK.

The EU guidelines are absolutely clear that the integrity and proper functioning of the Single Market must be upheld. The Government fully shares this view. A non-member of the Union, which does not live up to the obligations of membership, cannot have the same rights and enjoy the same benefits. In this context, it is important to note that the guidelines are also clear that, should the UK positions evolve, the EU will be prepared to reconsider its offer. This is vitally important from Ireland’s perspective. I must also stress that the agreement on a future relationship can only be finalised and concluded once the UK has become a third country, that is, after it leaves the EU on 29 March 2019. This is why a status quotransitional arrangement is so important, to give people time to adjust and to give politicians the time to negotiate a new relationship. For this reason we welcome that there has been conditional agreement between the EU and the UK on a transition period. Such an arrangement is essential for providing certainty to businesses and citizens, and for minimising unnecessary disruption.

In terms of the future relationship, the guidelines propose that a free trade agreement would cover all sectors and include zero tariffs on goods, and that it would also address trade in services. The proposed maintenance of reciprocal access to fishing waters and resources contained in the guidelines is also very welcome. The Government will continue to be firm in arguing that any agreement must protect key sectors of the Irish economy given the unique circumstances on the island of Ireland and the importance of our economic relationship with the UK.

In parallel with our engagement with the negotiating process, the Government is also acting to ensure that Ireland is Brexit ready. Dedicated measures were announced in budget 2018, including a new €300 million Brexit loan scheme for businesses and a €25 million Brexit response loan scheme for the agrifood sector. This is in addition to supports for capital investment in the food industry and Bord Bia marketing and promotion activities, amounting to over €50 million in total.The fund of €116 billion announced in Project 2040 for capital investment over the next decade will also allow the State and its agencies to properly plan major infrastructure projects which can accelerate economic growth and mitigate the impact of Brexit.

In my Department there has been a strong focus on extending our diplomatic reach with a view to helping Irish companies as they seek new markets in a post-Brexit world. Increased funds will allow for the opening of six new diplomatic missions over the year ahead as part of the first phase of expanding our global footprint.

At home and abroad, our Government's enterprise agencies continue to work with companies, helping them to deal with Brexit, making them more competitive, assessing opportunities for increased market exposure and upskilling teams. My Department is also leading an all-of-Government approach to contingency and scenario planning, including intensive work on a no-deal or worst-case scenario Brexit. Of course, work on a disorderly Brexit scenario is carried out very much in the spirit of "hoping for the best but planning for the worst". It is also the case that this work provides a baseline scenario for the impact of Brexit across all sectors, which can then be adapted as appropriate in light of developments in the EU-UK negotiations, including in respect of transition arrangements and the future relationship. This work is already well advanced and takes account of the extensive planning and outreach that has already been undertaken by individual Departments and agencies as well as by stakeholder organisations, academics and others. It also takes account of the work being undertaken at EU level by the Commission's new preparedness unit, which is issuing information notes aimed at different business sectors all the time.

The Government's engagement with stakeholders is significant in informing our approach to Brexit and taking advice and taking the temperature from different sectors all the time. My colleagues in government and I are in daily contact with individual companies as well as representative groups, whose valuable insights, analysis and expertise are critical to informing our approach to the EU-UK negotiations as well as our wider domestic response. It was encouraging this week to see the publication of a new IBEC report which confirms a dramatic increase in the number of companies now putting together Brexit plans or Brexit response plans. Over 20% of the companies polled already have a contingency plan in place, and 53% of the companies polled either had a plan in place or were in the process of preparing one. I think that if the same poll were to be carried out six months ago, the percentage of companies that were Brexit-ready or preparing to be so probably would have been in single figures.

The importance of this engagement with stakeholders was highlighted again just yesterday in Dundalk, where the perspectives of young people, civil society and the business community on a post-Brexit Ireland were debated and discussed in detail. Michel Barnier also had excellent engagement with a number of stakeholders, demonstrating once again the willingness of the EU to listen to the concerns of stakeholders here in Ireland.

We regret that Brexit is happening. We think it is a bad idea and a bad development for the European Union, a bad development for Britain and a bad development for Ireland. However, we must deal with the realities that unfold and respond and prepare accordingly. I assure the House that my Government colleagues and I will continue to work with both our EU and domestic partners, and indeed our friends in the UK, in the coming months to secure the best possible outcome for Ireland. In this respect, I welcome the continued support and engagement demonstrated by all parties in both Houses of the Oireachtas.

Finally, since it is my first time in the Seanad since two new Members have joined, may I say how delighted I am to see Senator Anthony Lawlor back in the Houses of the Oireachtas? I know him well and I am delighted he has been successful in being elected to the Seanad. I think he will serve this House very well. I also welcome in particular Senator Ian Marshall to the House. In the context of the debate we are having today, I am sure he will bring a perspective and an understanding that we need to hear in the context of the solutions we find to Brexit. Many unionists in Northern Ireland whom I have met have real fears and concerns about proposed solutions to solve significant problems linked to Brexit, particularly in respect of the Irish Border issue. I think Senator Marshall's contribution will enhance not only this debate, but also many of the other debates we will have linked to Northern Ireland and relations on this island and between Britain and Ireland, which I intend to develop in a positive way during my time in this Ministry. I thank the Acting Chairman and I look forward to hearing the Senators' contributions.