Garret Ahearn (Fine Gael)
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I thank the Minister of State for being here this morning. I am looking for an update on conversations that have been happening with the European Commission on tariffs with America. As we are all aware, an agreement had been reached a number of weeks or months ago of a 15% tariff for the EU with America. There had been a certain level of fear that that might change for pharmaceuticals and the medtech sector. Thankfully we have got clarity that it will remain at 15% even though other countries seem to be up at 100%.

I am asking about this because of the volatility in America where things can change very quickly. What conversations is the European Commission having? What is its strategy for dealing with America with the constant fear of things changing almost overnight? I spoke to a delegation from Switzerland and they were talking about the negotiations they had with America on tariffs. Everything had been agreed up to the morning that the agreement went to the White House, but within three hours everything changed and the tariffs were massively increased. The same has happened with Japan to a lesser extent.

As the Minister of State comes from Limerick, he will be very well aware of this. I speak about it in the context of my home town of Clonmel. Over the past 40 or 50 years, Clonmel has been very fortunate in having significant foreign direct investment for its size, particularly Merck Sharp and Dohme, which came 50 years ago. It now has Abbott, Boston Scientific and many more. They employ thousands of people in Tipperary and surrounding areas. It is important that we protect these well-paid and good jobs. I welcome many of the measures announced by the Minister for enterprise in the budget to protect jobs and companies, particularly investment in research and development to attract those companies to remain in Ireland regardless of changes made in America.

When we talk about tariffs and decisions made in America, we cannot forget that this has a direct impact on people in our own individual counties. That is why the conversations the European Commission is having on behalf of us and all countries in the European Union are critical to ensure that some sort of consistency or some sort of comfort and clarity can remain.

Niall Collins (Limerick County, Fianna Fail)
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I share Senator Ahearn’s concern and disappointment on the imposition of US tariffs.As I have said many times, tariffs are not good for anybody. They hurt business and consumers on both sides of the Atlantic. However, US trade policy has shifted and both Ireland and the EU have to respond to this new reality. The life sciences sector, which both the pharmaceutical industry and medtech are part of, is a significant sector of the economy and employs over 100,000 people. The Government recognises its importance, as evidenced by our commitment to develop a national life sciences strategy. After months of uncertainty, on 21 August, the EU and the US published a joint statement on the EU-US framework agreement on reciprocal, fair and balanced trade. It confirmed a single 15% tariff on EU goods inclusive of current MFN rates. It also made clear that any new tariff announced by the US under its section 232 investigation would be capped at this level. While there have been recent announcements on possible higher tariffs on pharmaceuticals, the EU was clear that the 15% tariff on the EU was a cap, which was confirmed by the US side. This example underlines the value of the agreement reached in August. This clear, all-inclusive 15% tariff ceiling for EU exports represents an insurance policy that no higher tariffs should emerge for Irish and European economic operators. The joint statement also includes lower tariff rate carve-outs for aircraft and aircraft parts, automobile and automobile parts. Importantly for the pharma sector, further carve-outs are to be determined for certain products in generic pharmaceuticals and chemical precursors. These tariff rates will be at the pre-existing US MFN rate, which is zero. This is welcome.

During the lead-up to the EU-US joint statement, the Tánaiste engaged intensively with EU and US counterparts, in particular the US Secretary of Commerce, Howard Lutnick, trade representative Jamieson Greer and Commissioner Maroš Šefovi, emphasising the huge potential and scope for the EU and the US to work together in the interests of patients, their economies and the pharma industry. While of course we do not want any US tariffs, the joint statement provides a degree of stability and certainty in what has been a very difficult period for Irish and European exporters to the US. I strongly believe this was the best available deal. However, I am acutely aware of the impact of higher tariffs and the existing difficulties that many Irish exporters have already faced this year as well as the possible implications for the all-Ireland economy. I fully appreciate that there will be disappointment and concern in some sectors, including medtech, which are hugely important sectors for the Irish economy. Importantly, however, the joint statement leaves the door open for negotiation of further tariff reductions in the future on products of strategic common interest. Ireland is now working with the European Commission to see what exemptions can be made in areas of interest for Irish exporters. We continue to advocate for these exemptions for the medtech sector, as well as for spirits.

Since the US Administration entered into office in January this year, the impact of US tariff policy on Ireland’s exports to the US has been a priority for the Government. The Tánaiste has made this clear to the US Administration, including in his most recent meeting with US Secretary of Commerce in September. In this regard, we have also had ongoing contacts with the European Commission to discuss Irish concerns, including with regard to the pharmaceutical and medtech sectors. This is done formally through Ireland’s representation at the trade policy committee, our ambassador to the EU in Brussels and the Foreign Affairs Council of trade ministers, where EU-US trade relations have been regularly discussed throughout the year. The Tánaiste has discussed Ireland’s concerns on a number of occasions directly with Commissioner Šefovi, most recently when he visited Dublin earlier this month where they discussed our concerns regarding pharma and medtech. I am in no doubt that the Commissioner understands the importance of these sectors for Ireland.

Garret Ahearn (Fine Gael)
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I thank the Minister of State for his response. When the Tánaiste and our diplomats have discussions with the European Commission, I hope it takes on our concerns particularly in relation to medtech and pharmaceuticals. As the Minister of State said, there are still possibilities for lower tariffs in certain areas. Medtech is one that needs to be highlighted on behalf of Ireland. A lot of work has been done in the past ten years or so to try to develop our economy. We have built it into the fastest growing economy in Europe, and a proportion of that is dependent on FDI and businesses we have in America. While we also need to look east and look for more opportunities in areas we have not before, it is important that we protect the livelihoods of people working in that sector as best we can in conjunction with the European Commission, making sure it is fully aware of the challenges Ireland has with these tariffs.

Niall Collins (Limerick County, Fianna Fail)
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I assure the Senator that pharma and medtech are hugely important sectors for the Irish economy, as is he well aware, and for Europe. The interconnected supply chains across countries and across the Atlantic are not just a necessity but ultimately make us more resilient and stronger in the manufacture and delivery of treatments that improve health and save lives. The health of these sectors is good not just for our own economy and jobs but for the health of our citizens. It is for this reason we will continue to make the case for low or zero tariffs on pharma and medtech as well as other important sectors in the economy. The Senator can rest assured we will continue to engage with the Commission and the US in seeking to protect important sectors.