Niall Collins (Limerick County, Fianna Fail)
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351. To ask the Minister for Jobs, Enterprise and Innovation if World Trade Organisation rules will apply between the EU and the UK in the event that a trade deal between the UK and the EU is not completed by the end of the Article 50 process; and if she will make a statement on the matter. [5195/17]

Niall Collins (Limerick County, Fianna Fail)
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352. To ask the Minister for Jobs, Enterprise and Innovation her views on the prospect of a free trade agreement between the EU and the UK and the application of State aid rules in the EU and the UK; and if she will make a statement on the matter. [5196/17]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I propose to take Questions Nos. 351 and 352 together.

The UK’s exit negotiations from the EU will not commence until Article 50 has been triggered, which the UK Government have indicated they intend to do no later than the end of March 2017.  These negotiations could take the maximum allowed period of two years to complete. Ultimately any deal on Article 50 will require the agreement of the EU Commission, Council and Parliament.

I understand that the UK will be seeking a Free Trade Agreement with the European Union and to secure the closest possible future relationship for Britain with the EU, a goal that Ireland shares.

Until the UK leaves the EU, all types of subsidies, both within the UK and across the other 27 EU Member States are subject to the discipline imposed by EU State Aid law.

Provisions on state aid (subsidies) and competition are a common feature of EU Free Trade Agreements to ensure any aid granted by authorities to private entities does not distort competition.  The terms of any future free trade agreement, including state aid rules, would be a matter for the EU 27 and the UK to agree as part of any negotiation.

Notwithstanding what the EU and UK agree to bilaterally, both remain bound by their obligations under the WTO, which has its own set of subsidy rules contained in the Agreement on Subsidies and Countervailing Measures.  WTO subsidy rules are similar in principle to EU State aid rules in many respects.

The World Trade Organisation (WTO) currently has 164 members which between them are responsible for 95% of world trade.  It is a negotiating forum for its members to create international trade rules, and an organisation to oversee how they put the rules into practice.

 It is unclear what trading arrangements will apply among WTO members in relation to the UK and the EU following the end of the Article 50 process.  There is no WTO precedent in this regard.  The UK cannot simply ‘cut and paste’ the terms of its current membership (as part of the EU) and carry those terms over. Depending on the terms of Brexit, at least some of these schedules will need to be rewritten, as the UK exit of the EU will affect the EU’s own commitments to other WTO members.

The EU’s current WTO schedules specify tariff levels for more than 5,000 categories of goods. Each of these tariffs could, in principle, need to be re-visited and renegotiated, depending on policy decisions taken by the UK Government and the attitude taken by other countries.

It will be a matter for the UK in the first instance to decide how best to approach its future position in the WTO.  The UK approach in this regard will also need to be cognisant of the EU Commission’s competency in trade matters while the UK remains a member of the EU.