Robert Troy (Longford-Westmeath, Fianna Fail)
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174. To ask the Minister for Jobs, Enterprise and Innovation if she will report on the EU-Vietnam Free Trade Agreement; the offensive and defensive interests for businesses and SMEs here in the deal; the details of market access and removal of import tariffs or duties by sector; and the timeline for same. [29005/19]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Negotiations for a comprehensive Free Trade Agreement between the EU and Vietnam were concluded in December 2015. After the process of “legal scrubbing” and the preparation of the legal texts in the various languages was completed, the EU and Vietnam signed the Free Trade Agreement (FTA) along with the EU-Vietnam Investment Protection Agreement (IPA) on 30th June last.

The FTA will unlock a market with significant potential for Irish and EU firms and includes the elimination of nearly all tariffs (over 99%) on EU exports to Vietnam. Widespread coverage is achieved at entry into force, with 65% of EU exports to Vietnam coming in duty-free from day one. Tariffs on our remaining trade – with the exception of a few products – will be fully liberalised after 10 years. These sensitive items are not offensive export interests for Ireland. The EU will liberalise 71% of its imports from Vietnam from day-one and 99% will enter duty-free after seven years. The EU-Vietnam FTA provides for the full dismantling of nearly all tariffs except for a few tariff lines that are subject to duty-free Tariff Rate Quotas (TRQs). The gradual elimination of custom duties on these sensitive products will allow domestic producers to gradually adapt. Consumers from both sides will benefit from lower prices and exporters from strengthened competitiveness.

Sectoral opportunities include almost all EU exports of machinery and appliances which will be fully liberalised at entry into force of the FTA. Around half of EU pharmaceutical exports will be duty-free immediately and the rest after seven years. Close to 70% of EU chemicals exports will be duty free at entry into force and the rest after three, five and seven years respectively. In addition, Vietnam will also simplify requirements for marketing authorisation of pharmaceutical products and medical devices, which in turn will reduce delays and costs for these important Irish exports.

The FTA also improves market access by addressing non-tariff barriers to trade and other trade related issues such as public procurement, competition, services, investment, intellectual property rights, regulatory issues, and sustainable development. The benefits and opportunities to business in the Agreement will be especially valuable for SMEs, given that trade barriers tend to disproportionately burden smaller firms, which have fewer resources to overcome them than larger firms.

In 2018, Ireland’s goods exports to Vietnam amounted to €65 million. Ireland’s main exports to Vietnam include medical and pharmaceutical products valued at €18.6m in 2018. Ireland's food exports to Vietnam have grown considerably in recent years. While meat and dairy products are the largest share of this, beverages and seafood also contributed strongly. In 2017 (the most recent year with available figures), services exports from Ireland to Vietnam were valued at €164m.

Through the Government’s Trade Strategy, ‘Ireland Connected: Trading and Investing in a Dynamic World’, we aim by 2020 to increase indigenous exports by Enterprise Ireland supported companies, including food, to reach €26 billion and secure 900 new foreign direct investments. As part of the Government’s Global Ireland 2025 strategy, Enterprise Ireland will open a new office in Ho Chi Minh City this year to support Irish businesses to expand into the Vietnamese market and to take advantage of the new opportunities presented by the FTA.

Opportunities exist for Ireland to grow exports in dairy products, pork, seafood and alcoholic beverages by taking advantage of reduced tariffs under the FTA. Currently tariffs on EU exports of spirits to Vietnam are particularly high at 48% and will be eliminated over a 7-year period following entry into force of the FTA. The elimination of tariffs of 15% on frozen pork products is also significant for Irish producers.

Ireland is an exceptionally open economy and is dependent on international trade and investment as sources of growth. Building new export opportunities for our businesses forms a vital part of Ireland’s enterprise strategy. We favour ambitious and balanced trade agreements, negotiated by the EU Commission on our behalf, which are designed to deliver jobs and growth for the benefit of our citizens. The EU-Vietnam FTA and the EU’s other trade agreements help to open new markets, break down barriers and provide new opportunities for Irish firms.

In a wider context, Vietnam is a member of the Association of South East Asian Nations (ASEAN). The EU is working towards achieving a region-to-region FTA with ASEAN by first concluding FTAs with individual ASEAN members. The first of these was signed with Singapore in October 2018, the Vietnam FTA is the second, and negotiations for an FTA with Indonesia, the largest county in the ASEAN group, are ongoing.

The text of the EU-Vietnam Agreement, including tariff schedules, has been published can be accessed at:

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Robert Troy (Longford-Westmeath, Fianna Fail)
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175. To ask the Minister for Jobs, Enterprise and Innovation if she will report on the EU-Mercosur Free Trade Agreement; the offensive and defensive interests for businesses and SMEs here in the deal; the market access and removal of import and export tariffs or duties by sector; the timeline for same; and if an impact assessment has been commissioned to date in relation to the deal. [29006/19]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Common Commercial Policy, including trade, is an exclusive competence of the European Union under the Treaty of the Functioning of the European Union. The European Commission acts as lead negotiator on behalf of all EU countries regarding trade agreements with non-EU countries. Member States (in Council) approve negotiating directives (or mandates) before negotiations begin, are consulted as the negotiations proceed and have final approval at Council as has the European Parliament.

The EU-Mercosur Agreement will see a comprehensive liberalisation of trade in goods. Mercosur will fully liberalise 91% of its imports from the EU over a transition period of 10 years with longer liberalisation of up to 15 years for some more sensitive products. The EU, in turn, will liberalise 92% of its imports from Mercosur over a transition period of up to 10 years. Tariff lines will also be liberalised with Mercosur liberalising 91% of its lines and the 95% in the EU.

Full details, including the line-by-line tariff breakdown of these sectors and the import/export tariff rates are not available at this time.  My officials await further detail from the Commission in this regard.

Ireland’s key offensive sectors within Mercosur are dairy, particularly cheese, powdered milk and infant formula with Mercosur agreeing to large tariff rate quotas of 30,000, 10,000 and 5,000 tonnes. Ireland also has offensive interests in the pharmaceutical, machinery, and chemical sector. For each of these sectors, liberalisation takes place for over 90% of EU exports.

The Agreement also sees the opening up of Mercosur’s public procurement market. Mercosur’s procurement market has up until this agreement not been available to EU firms. The Agreement, therefore, provides Irish SMEs with substantial opportunities. It will make it easier for our firms to bid for and win valuable Government contracts in the four Mercosur countries. The EU and Mercosur have agreed to apply modern disciplines based on the principles of non-discrimination, transparency, and fairness.

Furthermore, the Agreement also includes 335 Geographical Indicators (GIs) of EU origin. Irish Whiskey and Irish Cream are included in this list. The acceptance of EU GIs will significantly improve protection of these products from false or misleading branding in Mercosur markets. 

Ireland’s defensive interests are generally well known and understood at EU level. Access to the EU beef market has always been a particular sensitivity for Ireland and a number of other EU Member States. While it is disappointing that the agreement reached on beef access is more than we would have wished, it is far less than the Mercosur block originally sought. The deal that has been agreed provides necessary reassurances on food safety – i.e. that the EU will not accept any lesser standard in respect of the additional quota of 99,000 tonnes.  It also ensures an extended lead-in period (over six years) before full tariff reduction levels are reached. 

The EU-Mercosur Agreement also has a special chapter on SMEs. SMEs will benefit most from the simplification of exporting and customs procedures – as the savings are proportionately greater for them. A dedicated website will provide information on the Agreement for SMEs, practical guidance to importing and exporting will be published, and a dedicated data base on tariff reductions will be made available. The simplification of regulations on standards will help with trade barriers encountered by SMEs.

In relation to the Deputy’s question on an impact assessment, my Department commissioned by open tender, a study of Free Trade Agreements, more than 12 months ago.  Copenhagen Economics were awarded this contract as an internationally renowned trade modelling firm. The study covered a wide range of recent and prospective EU trade agreements, including that with Mercosur. The preliminary findings, which was grounded in the information available at the time, suggest a doubling of annual goods and services exports to Mercosur over the 10 years to 2030.

In light of the conclusion of the negotiations last Friday, my Department, in conjunction with the Department of Agriculture, Food and Marine will now ensure that a comprehensive, independent economic assessment is carried out specifically on the finalised EU-Mercosur Trade Agreement. This assessment will consider the impact the Agreement will have on the Irish economy and on jobs as well as the environmental implications of the deal. It will also consider how the EU-Mercosur Agreement might exacerbate/mitigate the likely impact of Brexit for our economy.  This assessment will help to inform our future actions in relation to EU-Mercosur agreement.