Thursday, 1 April 2021
Department of Finance
61. To ask the Minister for Finance the extent to which he remains satisfied regarding the adequacy of actions to date to combat the economic impact of Brexit; and if he will make a statement on the matter. [17640/21]
The new Trade and Cooperation Agreement between the EU and UK is a positive conclusion to the transition period. However, the new agreement still represents a break from previously existing arrangements, and thus a permanent shock to the Irish economy. Therefore, Brexit will still have a negative economic impact on the Irish economy and living standards compared to the previous relationship.
For Irish exporters, the Trade and Cooperation Agreement is positive, compared to a no-deal scenario, as it will provide for zero-tariffs and zero-quota trade for qualifying EU and UK goods. However, it is important to note that the agreement does not completely mitigate against trade frictions in the form of non-tariff barriers, such as customs checks and procedures. So, while tariffs and quotas have been avoided for qualifying goods, non-tariff measures or non-tariff barriers represent a change in trading relations and an increased cost to trade. In addition, disturbances to retail and distribution supply chains could have a direct impact on Irish consumers through reduced competition and higher prices. Further import controls will be introduced by the UK, on a phased basis from October 2021, on certain categories of EU goods, including plant and animal products.
The Government has put in place extensive financial supports for sectors over recent years to assist businesses prepare for and mitigate the impacts of Brexit, including various financial, advisory, and upskilling supports. The Government has also invested heavily in our port infrastructure, as well as working closely with businesses to navigate the new customs arrangements. A range of Government support is available to Irish exporters, including training and grants, to help businesses deal with these changes. It is vital that business prepare for the further changes which will arise over the coming months due to the UK’s new import controls.
The successful negotiation of the Protocol on Ireland / Northern Ireland, as part of the Withdrawal Agreement, delivered key economic objectives for Ireland. The Protocol secures Ireland’s place within the Single Market, avoids a hard border on the island, protects the all-island economy, and provides Northern Ireland with unique access to both the British internal market and the EU single market.
In the weeks since the end of the transition period on 31 December 2020, a level of trade friction has been evident. Given the phased basis of the new import controls which are being applied by the UK, it will take time for these to feed through to overall exporting activity, and to assess any associated economic impact.
The Government remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples’ livelihoods to the greatest extent possible.