Wednesday, 6 November 2019
Withdrawal of the United Kingdom from the European Union: Statements
We have to be conscious that the outcome of Brexit remains uncertain. As a Government, country and Parliament, we are still trying to plan for multiple potential outcomes. No deal is now far less likely, but it is certainly still a possibility. The intensive work on no-deal Brexit planning remains very much banked and ready to be used if necessary. We are now focusing on what we had previously described as a central case scenario, namely, the likelihood of getting a withdrawal agreement and then moving into a transition period. We need to prepare for that but also for the potential outcomes. If the UK Government ratifies the withdrawal agreement and the UK leaves the EU at the end of January, a new risk could emerge at that point.At the end of the transition period, that is at the end of 2020, if the UK does not apply for more time, there is then the risk of not having a deal and not having any managed process or structure to continue that dialogue. We would have the protections of the withdrawal agreement, in the context of the special arrangements for Northern Ireland to prevent Border infrastructure, protect the common travel area, CTA, and everything else that it does, but there could be significant pressure on our east-west trading relationship. We have to anticipate the different outcomes and prepare the country for them, as we have tried to do right throughout this process. That is despite the unpredictability of political debates and outcomes in Westminster.
For the first time, this week I brought a paper to Cabinet that focused more on preparation for the future relationship discussion than on a no-deal Brexit, although it did focus on both of those issues. We will certainly gear up to ensure that Ireland remains relevant and as influential as we can be in shaping the outcome of a future relationship negotiation. We are fortunate that Michel Barnier will be staying on as the EU chief negotiator, but in a slightly different co-ordinating role. He certainly understands and knows the British-Irish relationship intimately and that will be helpful in the context of the discussion of the future relationship. That will be the case, whatever the issues at stake, whether fishing, data protection or the implementation of the arrangements in the withdrawal agreement.
We will, of course, also have Phil Hogan as the EU trade commissioner. He obviously understands Ireland's politics and economy and the unique exposure that have in many ways to the British economy. It is true that only 11% to 13% of Irish exports are now going to the UK, that does not tell the full story. Some 40,000 Irish companies trade with the UK every month. In the past two years, approximately 102,000 Irish companies either traded with or through the UK. We know that because the Revenue Commissioners wrote to all of them during the summer to encourage them to prepare for different outcomes to Brexit.
The relationship for SMEs is important and that future relationship, from an Irish perspective, needs to be as integrated and close as we can make it. That is why the ambition in the future relationship declaration for a quota-free, tariff-free trading relationship on the back of a free trade agreement is one that we will look to shape in a positive way. We will also, however, be supportive of the EU position that if a tariff-free, quota-free trading relationship is to be facilitated, it will also have to have clear level playing field mechanisms in place to ensure that if the UK moves away from an EU regulatory model that we will not compete with the UK at a disadvantage.
The political declaration is clear that the extent of the level playing field mechanisms within the withdrawal agreement will be directly related to how free the trade will be in the context of access tariffs and quotas. That is going to become a difficult negotiation, as is every free trade agreement, but it is one that I hope we can progress positively to provide as much certainty as we can for businesses. We must also, of course, try to protect the €70 billion trade relationship we have east-west each year with the UK, which is greatly important for us.
I will say a few words about Northern Ireland because several contributors have made comments on this aspect.