Billy Kelleher (Cork North Central, Fianna Fail)
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116. To ask the Minister for Jobs, Enterprise and Innovation the status of the recent EU Council trade ministers meeting regarding the commencement of EU trade agreement negotiations with Australia and New Zealand; the offensive and defensive interests for Irish businesses and SMEs in this deal; if she will provide a sector by sector breakdown in terms of market access and removal of import tariffs or duties; and the timeline for same. [24194/18]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Negotiating Directives for Free Trade Agreements (FTAs) with both Australia and New Zealand were agreed by EU Trade Ministers at the Trade Council on 22nd May 2018.

The draft negotiating directives were first published by the European Commission on the 13th September 2017.  Since then my Department has been actively engaged at EU level, principally through the Trade Policy Committee, in working to arrive at a position whereby the negotiations for FTAs with New Zealand and Australia can begin.  I am pleased that this has now been achieved with the Ministerial approval of the Negotiating Directives.

The EU Commission has “competence” on Trade matters under the Treaties and the EU Trade Commissioner, Cecilia Malmström, plans to travel to Canberra and Wellington in June to officially open negotiations, at political level, of separate EU Free Trade Agreements with Australia and New Zealand.  The negotiating teams are then expected to meet in Brussels in July for the first round of negotiations.

As the negotiations have not yet begun it is not possible to provide details of specific offers on market access or details of tariff reductions.  No offers have yet been made.  The specific market access concessions and tariff reduction measures will be arrived at through the negotiation process.  Officials from my Department will continue to be engaged, through the Trade Policy Committee, in working towards ambitious FTAs with these two important trading partners for both the EU and Ireland in order to achieve Agreements that remove barriers to trade and that provide opportunities for Irish businesses including SMEs.

As SMEs lack resources available to larger companies, non-tariff barriers such as differing regulatory frameworks affect SMEs more heavily.  For this reason, an ambitious and comprehensive FTA will represent the best outcome if Irish SMEs are to reap the benefits.

The EU’s recent Free Trade Agreements include chapters specifically focussed on SMEs and this will be the aim with New Zealand and Australia.  The proposed FTAs should also involve provisions that simplify customs procedures and administrative requirements that will benefit small exporters.  Such measures are very important for the growth of SMEs and in enabling them to diversify into new markets in order to deal with, among other challenges, the impacts of Brexit.

Ireland, like all Member States, has defensive as well as offensive trade interests.  We are mindful of the cumulative impact of EU FTAs on specific sectors like agriculture and the challenges they face.  Maintaining the balance between defensive and offensive interests is a matter for the negotiations.

In 2017, Ireland’s good exports to Australia were €889m.  Key goods exports include medical products and devices, pharmaceuticals, and computers and computer parts. Ireland’s services exports to Australia have grown significantly in recent years from €203m in 2003 to €2,818m in 2016 (the most recent year for which CSO figures are available).  

In 2017, Ireland’s good exports to New Zealand were €109m.  Services exports amounted to €232m in 2016, the most recent year for which figures are available. Key goods exports include medical products and pharmaceuticals products, industrial machinery and dairy products.

In the FTAs with Australia and New Zealand, we will seek to include a chapter on services that should aim to remove barriers to international trade in services that should facilitate further growth.

My Department is currently in the process of undertaking a comprehensive study which will examine in depth the economic impact and opportunities of existing and forthcoming EU Free Trade Agreements, including the Australia and New Zealand FTAs.  The analysis from the study will inform the Department and relevant agencies in setting the policy framework required for Irish businesses to take full advantage of concluded trade agreements and preferential trade access, and to prepare for future opportunities; including Australia and New Zealand.

The EU is predicted to increase its exports to Australia and New Zealand by as much as one third if an ambitious and comprehensive Free Trade Agreement can be delivered.

EU exports to Australia of dairy and, to a lesser other food and beverages are expected to increase significantly. An EU-New Zealand FTA would result in a long-term increase of EU exports of non-ruminant meat e.g. pork; dairy; and to a lesser extent, other food and beverages.

The EU’s Impact Assessment identified the main sectors in which EUbusinesses reported experiencing problems accessing the market in Australia and New Zealand. These included agriculture and food products (beef meat, pig meat, dairy, processed food products, and alcoholic drinks). While some agriculture products, in particular beef, are sensitive for Irish businesses the removal of these barriers to trade in Australia and New Zealand may also open export opportunities for Irish producers.

The EU’s analysis indicates growth of exports for all sectors apart from minor decreases of EU exports of some agricultural sub-sectors (rice, cereals, fruit and vegetables and fibres and other crops - all of these have low EU trade volumes).

Both New Zealand and Australia were among the 11 countries that signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in March 2018. In light of the benefits that CPTPP offers its signatories it is important that the EU conclude its own trade deals with participating countries in order to ensure that Irish businesses are not at a competitive disadvantage.

While it is not currently possible to specify the date at which any agreement might come into effect, such agreements usually take a number of years to negotiate and a further one or two years for the so-called “legal scrubbing” of the text of the agreement. In addition, depending on what is negotiated in respect of any particular sector or class of goods, there are often multi-annual phasing period for specific commitments.